Part 22.
TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY
Chapter 501.
RULES OF PROFESSIONAL CONDUCT
Subchapter A. GENERAL PROVISIONS
22 TAC §501.52
The Texas State Board of Public Accountancy (Board) proposes
an amendment to §501.52, concerning Definitions.
The amendment to §501.52 will add the Administrative Code citation
for the board's rules, place quotation marks around terms to be defined and
add limited liability partnerships and limited liability companies to the
definition of a CPA firm.
William Treacy, Executive Director of the Board, has determined that for
the first five-year period the proposed amendment will be in effect:
A. the additional estimated cost to the state expected as a result of enforcing
or administering the amendment will be zero.
B. the estimated reduction in costs to the state and to local governments
as a result of enforcing or administering the amendment will be zero.
C. the estimated loss or increase in revenue to the state as a result of
enforcing or administering the amendment will be zero.
Mr. Treacy has determined that for the first five-year period the amendment
is in effect the public benefits expected as a result of adoption of the proposed
amendment will be that the definitions will be clearer and easier to read.
The probable economic cost to persons required to comply with the amendment
will be zero.
Mr. Treacy has determined that a Local Employment Impact Statement is not
required because the proposed amendment will not affect a local economy.
The Board requests comments on the substance and effect of the proposed
amendment from any interested person. Comments must be received at the Board
no later than noon on April 29, 2004. Comments should be addressed to Rande
Herrell, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe,
Tower 3, Suite 900, Austin, Texas 78701 or faxed to her attention at (512)
305-7854.
Mr. Treacy has determined that the proposed amendment will not have an
adverse economic effect on small businesses because the amendments are to
the definitions of terms and they do not cause anyone to do or not do anything.
The Board specifically invites comments from the public on the issues of
whether or not the proposed amendment will have an adverse economic effect
on small business; if the amendment is believed to have such an effect, then
how may the Board legally and feasibly reduce that effect considering the
purpose of the statute under which the amendment is to be adopted; and if
the amendment is believed to have such an effect, how the cost of compliance
for a small business compares with the cost of compliance for the largest
business affected by the amendment under any of the following standards: (a)
cost per employee; (b) cost for each hour of labor; or (c) cost for each $100
of sales. See Texas Government Code, §2006.002(c).
The amendment is proposed under the Public Accountancy Act ("Act"),
Texas Occupations Code, §901.151 which authorizes the Board to adopt
rules deemed necessary or advisable to effectuate the Act.
No other article, statute or code is affected by this proposed amendment.
§501.52.Definitions.
The following words and terms, when used in
Title 22, Part 22
of the Texas Administrative Code relating to the Texas State Board of Public
Accountancy,
[
(1)
"
Act
" means the
[
(2)
"
Advertisement
" means a
[
(3)
"
Affiliated entity
" means an
[
(4)
"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)
a review, compilation or other 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;
(C)
an engagement required by the board to be performed in
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
;
[
(5)
"
Board
" means the
[
(6)
"
Certificate or registration holder
" the
[
(A)
certificates issued to individuals who have been awarded
the designation certified public accountant by the board pursuant to the Act,
or pursuant to corresponding provisions of a prior Act;
(B)
registrations with the board under §901.355 of the
Act; and
(C)
firm licenses or registrations
;
[
(7)
"
Charitable Organization
" means an
[
(8)
"
Client
" means a
[
(9)
"
Client Practice of Public Accountancy
"
is the offer to perform or the performance by a certificate or registration
holder for a client or a potential client of a service involving the use of
accounting, attesting, or auditing skills. The phrase "service involving the
use of accounting, attesting, or auditing skills" includes:
(A)
the issuance of reports on, or the preparation of, financial
statements, including historical or prospective financial statements or any
element thereof;
(B)
the furnishing of management or financial advisory or consulting
services;
(C)
the preparation of tax returns or the furnishing of advice
or consultation on tax matters;
(D)
the advice or recommendations in connection with the sale
or offer for sale of products (including the design and implementation of
computer software), when the advice or recommendations routinely require or
imply the possession of accounting or auditing skills or expert knowledge
in auditing or accounting; and/or
(E)
the performance of
litigation support services
;
[
(10)
"
Commission
" means compensation
[
(11)
"
Contingent fee
" means a
[
(12)
"
Financial Statements
" means a
[
(13)
"
Firm
" means a
[
(14)
"
Good standing
" means compliance
[
(15)
"
Licensee
" means the
[
(16)
"
Peer review
"
or
"
Quality
Review
" means the
[
(17)
"
Person
" means an
[
(18)
"
Practice unit
" means an
[
(19)
"
Professional services
"
or
"
professional accounting work
"
[
(A)
issuing reports on financial statements;
(B)
providing management or financial advisory or consulting
services;
(C)
preparing tax returns; and
(D)
providing advice in tax matters
;
[
(20)
"
Report
" means, when
[
(21)
Interpretive Comment: The practice of public accountancy
is defined in §901.003 of the Act (relating to the Practice of Public
Accountancy).
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on March 18, 2004.
TRD-200402037
Rande Herrell
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: May 2, 2004
For further information, please call: (512) 305-7848
22 TAC §501.53
The Texas State Board of Public Accountancy (Board) proposes
an amendment to §501.53, concerning Applicability of Rules of Professional
Conduct.
The amendment to §501.53 will add §501.78 (regarding Withdrawal
or Resignation) to the list of rules of professional conduct that are applicable
to CPAs that do not engage in the client practice of public accountancy.
William Treacy, Executive Director of the Board, has determined that for
the first five-year period the proposed amendment will be in effect:
A. the additional estimated cost to the state expected as a result of enforcing
or administering the amendment will be zero.
B. the estimated reduction in costs to the state and to local governments
as a result of enforcing or administering the amendment will be zero.
C. the estimated loss or increase in revenue to the state as a result of
enforcing or administering the amendment will be zero.
Mr. Treacy has determined that for the first five-year period the amendment
is in effect the public benefits expected as a result of adoption of the proposed
amendment will be that this rule will be applicable to all licensed CPAs.
The probable economic cost to persons required to comply with the amendment
will be zero.
Mr. Treacy has determined that a Local Employment Impact Statement is not
required because the proposed amendment will not affect a local economy.
The Board requests comments on the substance and effect of the proposed
amendment from any interested person. Comments must be received at the Board
no later than noon on Thursday, April 29 2004. Comments should be addressed
to Rande Herrell, General Counsel, Texas State Board of Public Accountancy,
333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to her attention
at (512) 305-7854.
Mr. Treacy has determined that the proposed amendment will not have an
adverse economic effect on small businesses because there are no costs associated
with this rule.
The Board specifically invites comments from the public on the issues of
whether or not the proposed amendment will have an adverse economic effect
on small business; if the amendment is believed to have such an effect, then
how may the Board legally and feasibly reduce that effect considering the
purpose of the statute under which the amendment is to be adopted; and if
the amendment is believed to have such an effect, how the cost of compliance
for a small business compares with the cost of compliance for the largest
business affected by the amendment under any of the following standards: (a)
cost per employee; (b) cost for each hour of labor; or (c) cost for each $100
of sales. See Texas Government Code, §2006.002(c).
The amendment is proposed under the Public Accountancy Act ("Act"),
Texas Occupations Code, §901.151 which authorizes the Board to adopt
rules deemed necessary or advisable to effectuate the Act.
No other article, statute or code is affected by this proposed amendment.
§501.53.Applicability of Rules of Professional Conduct.
(a)
All of the rules of professional conduct shall apply to
and must be observed by a certificate or registration holder engaged in the
client practice of public accountancy.
(b)
No certificate or registration holder shall issue, or otherwise
be associated with, financial statements that do not conform to the accounting
principles described in Section 501.61 of this title (relating to Accounting
Principles).
(c)
The following rules of professional conduct shall apply
to and be required to be observed by certificate or registration holders when
not employed in the client practice of public accountancy:
(1)
Section 501.73 of this title (relating to Integrity and
Objectivity);
(2)
Section 501.74 of this title (relating to Competence);
(3)
Section 501.77 of this title (relating to Acting through
Others);
(4)
Section 501.78 of this title (relating
to Withdrawal or Resignation);
(5)
[
(6)
[
(7)
[
(8)
[
(9)
[
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on March 18, 2004.
TRD-200402038
Rande Herrell
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: May 2, 2004
For further information, please call: (512) 305-7848
22 TAC §501.80
The Texas State Board of Public Accountancy (Board) proposes
an amendment to §501.80, concerning Practice of Public Accountancy.
The amendment to §501.80 will clearly state that a person must possess
both a certificate and a current license in order to represent that they are
a Certified Public Accountant.
William Treacy, Executive Director of the Board, has determined that for
the first five-year period the proposed amendment will be in effect:
A. the additional estimated cost to the state expected as a result of enforcing
or administering the amendment will be zero.
B. the estimated reduction in costs to the state and to local governments
as a result of enforcing or administering the amendment will be zero.
C. the estimated loss or increase in revenue to the state as a result of
enforcing or administering the amendment will be zero.
Mr. Treacy has determined that for the first five-year period the amendment
is in effect the public benefits expected as a result of adoption of the proposed
amendment will be a clear statement that unlicensed persons may not represent
that they are CPAs.
The probable economic cost to persons required to comply with the amendment
will be zero.
Mr. Treacy has determined that a Local Employment Impact Statement is not
required because the proposed amendment will not affect a local economy.
The Board requests comments on the substance and effect of the proposed
amendment from any interested person. Comments must be received at the Board
no later than noon on Thursday, April 29, 2004. Comments should be addressed
to Rande Herrell, General Counsel, Texas State Board of Public Accountancy,
333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to her attention
at (512) 305-7854.
Mr. Treacy has determined that the proposed amendment will not have an
adverse economic effect on small businesses because there are no costs associated
with this rule.
The Board specifically invites comments from the public on the issues of
whether or not the proposed amendment will have an adverse economic effect
on small business; if the amendment is believed to have such an effect, then
how may the Board legally and feasibly reduce that effect considering the
purpose of the statute under which the amendment is to be adopted; and if
the amendment is believed to have such an effect, how the cost of compliance
for a small business compares with the cost of compliance for the largest
business affected by the amendment under any of the following standards: (a)
cost per employee; (b) cost for each hour of labor; or (c) cost for each $100
of sales. See Texas Government Code, §2006.002(c).
The amendment is proposed under the Public Accountancy Act ("Act"),
Texas Occupations Code, §901.151 which authorizes the Board to adopt
rules deemed necessary or advisable to effectuate the Act.
No other article, statute or code is affected by this proposed amendment.
§501.80.Practice of Public Accountancy.
(a)
A certificate or registration holder may not engage in
the practice of public accountancy unless he holds a valid license issued
by the board.
A certificate or registration holder may not use the title
or designation "certified public accountant", the abbreviation "CPA", or any
other title, designation, word, letter, abbreviation, sign, card, or device
tending to indicate that the person is a certified public accountant unless
he holds a valid license issued by the board.
A license is not valid
for any date or for any period prior to the date it is issued by the board
and it automatically expires and is no longer valid after the end of the period
for which it is issued.
(b)
Any licensee of this board in good standing as a certified
public accountant or public accountant may use such designation whether or
not the licensee is in the client, industry, or government practice of public
accountancy. However, a licensee who is not in the client practice of public
accountancy may not in any manner, through use of the CPA designation or otherwise,
claim or imply independence from his employer or that the licensee is in the
client practice of public accountancy.
(c)
Interpretive Comment: This section incorporates the definitions
of the practice of public accountancy and professional services and accounting
work found in §501.52(9) and §501.52(19) of this title (relating
to Definitions) as well as §901.003 of the Act (relating to Practice
of Public Accountancy).
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on March 18, 2004.
TRD-200402039
Rande Herrell
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: May 2, 2004
For further information, please call: (512) 305-7848
22 TAC §509.6
The Texas State Board of Public Accountancy (Board) proposes
new §509.6, concerning Rulemaking Procedures.
The new §509.6 moves, re-names and re-numbers former §519.3.
This new rule is the result of rule review conducted pursuant to §2001.039
of the Government Code. Government Code §2001.039 requires that each
state agency review and consider for readoption each rule adopted by that
agency pursuant to the Government Code, Chapter 2001 (Administrative Procedure
Act). The Board published a Notice of Intention to Review Title 22, TAC, Part
22, Chapter 509 in the February 7, 2003, issue of the
Texas Register
(28 TexReg 1234). No comments were received following
publication of the notice.
William Treacy, Executive Director of the Board, has determined that for
the first five-year period the proposed new rule will be in effect:
A. the additional estimated cost to the state expected as a result of enforcing
or administering the new rule will be zero because the rule does not affect
costs to the state.
B. the estimated reduction in costs to the state and to local governments
as a result of enforcing or administering the new rule will be zero because
the rule does not affect the state and local governments.
C. the estimated loss or increase in revenue to the state as a result of
enforcing or administering the new rule will be zero.
Mr. Treacy has determined that for the first five-year period the new rule
is in effect the public benefits expected as a result of adoption of the proposed
new rule will be that the rule will be in a more logical location.
The probable economic cost to persons required to comply with the new rule
will be zero.
Mr. Treacy has determined that a Local Employment Impact Statement is not
required because the proposed new rule will not affect a local economy.
The Board requests comments on the substance and effect of the proposed
new rule from any interested person. Comments must be received at the Board
no later than noon on Thursday, April 29, 2004. Comments should be addressed
to Rande Herrell, General Counsel, Texas State Board of Public Accountancy,
333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to her attention
at (512) 305-7854.
Mr. Treacy has determined that the proposed new rule will not have an adverse
economic effect on small businesses because the rule only re-names the rule,
re-numbers and moves it to a more appropriate location.
The Board specifically invites comments from the public on the issues of
whether or not the proposed new rule will have an adverse economic effect
on small business; if the new rule is believed to have such an effect, then
how may the Board legally and feasibly reduce that effect considering the
purpose of the statute under which the new rule is to be adopted; and if the
new rule is believed to have such an effect, how the cost of compliance for
a small business compares with the cost of compliance for the largest business
affected by the new rule under any of the following standards: (a) cost per
employee; (b) cost for each hour of labor; or (c) cost for each $100 of sales.
See Texas Government Code, §2006.002(c).
The new rule is proposed under the Public Accountancy Act ("Act"),
Texas Occupations Code, §901.151 which authorizes the Board to adopt
rules deemed necessary or advisable to effectuate the Act and §2001.039
of the Government Code Chapter 2001 (Administrative Procedure Act) that requires
that each state agency review and consider for readoption each rule adopted
by that agency.
No other article, statute or code is affected by this proposed new rule.
§509.6.Rulemaking Procedures.
(a)
Notice of a proposed new rule or amendment of any existing
rule shall be made in accordance with the provisions of §2001.023 and §2001.024
of the Administrative Procedure Act.
(b)
A request for a public hearing to receive comments on a
proposed new rule or amendment to an existing rule must be received in the
offices of the board no later than 5:00 p.m. of the twentieth calendar day
prior to the board meeting scheduled to consider the adoption of the proposed
rule.
(c)
A person wishing to testify at a public hearing to receive
comments on a proposed new rule or amendment to an existing rule must file
a written copy of the proposed testimony in the offices of the board by no
later than 5:00 p.m. of the fifth calendar day prior to the public hearing
unless the board announces a different filing date.
(d)
It is the board's policy to encourage negotiated rule making
when appropriate.
(e)
The executive director shall designate a board employee
as the board's Negotiated Rulemaking Director to implement the provisions
of the Negotiated Rulemaking Act, Chapter 2008 of the Texas Government Code,
and perform the following functions:
(1)
maintain necessary agency records of negotiated rulemaking
procedures while maintaining the confidentiality of participants;
(2)
establish a method of choosing conveners and facilitators
as defined by the Negotiated Rulemaking Act, Chapter 2008 of the Texas Government
Code;
(3)
establish a method of convening negotiated rules committees;
(4)
provide information about the negotiated rulemaking process
to agency employees, potential users, and users of the negotiated rulemaking
program;
(5)
arrange training or education necessary to implement the
negotiated rulemaking process; and
(6)
establish a system to evaluate the negotiated rulemaking
program, conveners, facilitators, and committees.
(f)
The board or the Rules Committee may request the Negotiated
Rulemaking Director to institute negotiated rulemaking proceedings on a specified
subject. Upon receipt of such a request, the Negotiated Rulemaking Director
shall institute the negotiated rulemaking process pursuant to Chapter 2008
of the Texas Government Code.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on March 18, 2004.
TRD-200402040
Rande Herrell
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: May 2, 2004
For further information, please call: (512) 305-7848
22 TAC §518.1, §518.2
(Editor's note: The text of the following sections proposed for
repeal will not be published. The sections may be examined in the offices
of the Texas State Board of Public Accountancy or in the Texas Register office,
Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)
The Texas State Board of Public Accountancy (Board)
proposes the repeal of §518.1, concerning Cease and Desist Orders and §518.2,
concerning Administrative Penalty Guidelines for Violations of Cease and Desist
Orders.
The proposed repeal of §518.1 and §518.2 will repeal two rules
that are being rewritten and relocated.
William Treacy, Executive Director of the Board, has determined that for
the first five-year period the proposed repeals will be in effect:
A. the additional estimated cost to the state expected as a result of enforcing
or administering the repeals will be zero.
B. the estimated reductions in costs to the state and to local governments
as a result of enforcing or administering the repeals will be zero.
C. the estimated loss or increase in revenue to the state as a result of
enforcing or administering the repeals will be zero.
Mr. Treacy has determined that for the first five-year period the repeals
are in effect the public benefits expected as a result of adoption of the
proposed repeals will be that these two rules will be rewritten and relocated.
The probable economic cost to persons required to comply with the repeals
will be zero.
Mr. Treacy has determined that a Local Employment Impact Statement is not
required because the proposed repeals will not affect a local economy.
The Board requests comments on the substance and effect of the proposed
repeals from any interested person. Comments must be received at the Board
no later than noon on Thursday, April 29, 2004. Comments should be addressed
to Rande Herrell, General Counsel, Texas State Board of Public Accountancy,
333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to her attention
at (512) 305-7854.
Mr. Treacy has determined that the proposed repeals will not have an adverse
economic effect on small businesses because there are no costs associated
with the repeal of these rules.
The Board specifically invites comments from the public on the issues of
whether or not the proposed repeals will have an adverse economic effect on
small business; if the repeals are believed to have such an effect, then how
may the Board legally and feasibly reduce that effect considering the purpose
of the statute under which the repeals are to be adopted; and if the repeals
are believed to have such an effect, how the cost of compliance for a small
business compares with the cost of compliance for the largest business affected
by the repeal under any of the following standards: (a) cost per employee;
(b) cost for each hour of labor; or (c) cost for each $100 of sales. See Texas
Government Code, §2006.002(c).
The repeals are proposed under the Public Accountancy Act ("Act"),
Texas Occupations Code, §901.151 which provides the agency with the authority
to amend, adopt and repeal rules deemed necessary or advisable to effectuate
the Act.
No other article, statute or code is affected by these proposed repeals.
§518.1.Cease and Desist Orders.
§518.2.Administrative Penalty Guidelines for Violations of Cease and Desist Orders.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on March 18, 2004.
TRD-200402041
Rande Herrell
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: May 2, 2004
For further information, please call: (512) 305-7848
22 TAC §§518.1 - 518.4
The Texas State Board of Public Accountancy (Board) proposes
new §518.1, concerning Definitions, §518.2, concerning Cease and
Desist Orders, §518.3, concerning Violation of a Cease and Desist Order
and §518.4, concerning Administrative Penalty Guidelines for Violations
of Cease and Desist Orders.
The new §§518.1 - 518.4 will explain that the definitions in
Chapter 519 are applicable to Chapter 518, will describe the cease and desist
orders, the procedures and the consequences for not complying with cease and
desist orders.
William Treacy, Executive Director of the Board, has determined that for
the first five-year period the proposed new rules will be in effect:
A. the additional estimated cost to the state expected as a result of enforcing
or administering the new rules will be zero or minimal because the new SOAH
issued cease and desist orders replace the previous court issued permanent
injunctions.
B. the estimated reduction in costs to the state and to local governments
as a result of enforcing or administering the new rules will be from the elimination
of court filing fees and service of citation, and these savings are estimated
to be about $320 per year.
C. the estimated loss or increase in revenue to the state as a result of
enforcing or administering the new rules will be zero.
Mr. Treacy has determined that for the first five-year period the new rules
are in effect the public benefits expected as a result of adoption of the
proposed new rules will be that SOAH offers faster hearing dates than district
courts.
The probable economic cost to persons required to comply with the new rules
will be zero because the compliance that is required is with other rules or
laws, not these rules.
Mr. Treacy has determined that a Local Employment Impact Statement is not
required because the proposed new rules will not affect a local economy.
The Board requests comments on the substance and effect of the proposed
new rules from any interested person. Comments must be received at the Board
no later than noon on Thursday, April 29, 2004. Comments should be addressed
to Rande Herrell, General Counsel, Texas State Board of Public Accountancy,
333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to her attention
at (512) 305-7854.
Mr. Treacy has determined that the proposed new rules will not have an
adverse economic effect on small businesses because the compliance that is
required is with other rules or laws, not these rules.
The Board specifically invites comments from the public on the issues of
whether or not the proposed new rules will have an adverse economic effect
on small business; if the new rules are believed to have such an effect, then
how may the Board legally and feasibly reduce that effect considering the
purpose of the statute under which the new rules are to be adopted; and if
the new rules are believed to have such an effect, how the cost of compliance
for a small business compares with the cost of compliance for the largest
business affected by the new rules under any of the following standards: (a)
cost per employee; (b) cost for each hour of labor; or (c) cost for each $100
of sales. See Texas Government Code, §2006.002(c).
The new rules are proposed under the Public Accountancy Act ("Act"),
Texas Occupations Code, §901.151 which authorizes the Board to adopt
rules deemed necessary or advisable to effectuate the Act.
No other article, statute or code is affected by these proposed new rules.
§518.1.Definitions.
The definitions contained in Chapter 519 of this title apply to this
chapter.
§518.2.Cease and Desist Orders.
(a)
Whenever the board, through its Executive Committee, determines
that a person is engaging in an act or practice that constitutes the practice
of public accountancy without a license issued under the Act, the board, through
its Executive Committee, after notice and an opportunity for a hearing, may
issue a cease and desist order prohibiting the person from engaging in that
activity. The Executive Committee may issue a cease and desist order by agreement
or after a hearing in a contested matter. A cease and desist order issued
by the Executive Committee must by ratified by the board at its next regularly
scheduled meeting.
(b)
A hearing under this rule shall be conducted in the manner
of a contested case pursuant to the Act, the APA, the board's rules and SOAH's
rules; provided that the time limits provided in this rule control.
(c)
Upon the filing of a request to docket the case, SOAH shall
set the matter for hearing no later than 20 days from the date of the request.
The ALJ shall deliver a PFD and recommendation as to whether a cease and desist
order should be issued to the Executive Committee no later than five days
after the completion of the hearing. The Executive Committee shall make its
determination as to whether to issue a cease and desist order no later than
five days after receipt of the PFD and recommendation.
(d)
Pursuant to Chapter 551 of the Texas Government Code (relating
to Open Meetings), the Executive Committee may hold a meeting by telephone
conference call if immediate action is required and the convening at one location
of the Executive Committee is inconvenient for any member of the Committee.
§518.3.Violation of a Cease and Desist Order.
(a)
Whenever the board, through its Executive Committee, determines
that a person subject to a cease and desist order issued by the board has
violated that order, the board, through its Executive Committee, after notice
and an opportunity for a hearing, may assess an administrative penalty against
the person in violation in accordance with the guidelines contained in §518.4
of this title (relating to Administrative Penalty Guidelines for Violations
of Cease and Desist Orders).
(b)
The board shall give notice of the assessment of an administrative
penalty in accordance with §901.553 of the Act. The person may pay the
penalty or request a hearing in accordance with §901.554 of the Act.
A hearing under this rule shall be conducted in the manner of a contested
case pursuant to the Act, the APA, the board's rules and SOAH's rules; provided
that the time limits provided in this rule control.
(c)
Upon the filing of a request to docket the case, SOAH shall
set the matter for hearing no later than 20 days from the date of the request.
The ALJ shall deliver a PFD to the Executive Committee no later than five
days after the completion of the hearing. The Executive Committee shall make
its determination as to whether to assess an administrative penalty no later
than five days after receipt of the PFD. If a penalty is assessed the person
may pay or appeal the board's order in accordance with §901.556 of the
Act.
(d)
Pursuant to Chapter 551 of the Texas Government Code (relating
to Open Meetings), the Executive Committee may hold a meeting by telephone
conference call if immediate action is required and the convening at one location
of the Executive Committee is inconvenient for any member of the Committee.
§518.4.Administrative Penalty Guidelines for Violations of Cease and Desist Orders.
The amount of the administrative penalty assessed under this chapter
will be in accordance with the following guidelines:
(1)
an unlicensed individual who uses terms restricted for
use by certified public accountants only in violation of §§901.451,
901.452 and 901.453 of the Act shall pay a penalty of no less than $1,000.00
and no more than $5,000.00;
(2)
an unlicensed entity that uses terms restricted for use
by licensed firms only in violation of §901.351(a) of the Act shall pay
a penalty of no less than $5,000.00 and no more than $10,000.00;
(3)
an unlicensed individual who claims to provide "accounting
services" or other non-attest services reserved for licensed certified public
accountants and licensed certified public accounting firms shall pay a penalty
of no less than $1,000.00 and no more than $5,000.00;
(4)
an unlicensed entity that claims to provide "accounting
services" or other non-attest services reserved for licensed certified public
accountants and licensed certified public accounting firms shall pay a penalty
of no less than $5,000.00 and no more than $10,000.00;
(5)
an unlicensed individual who claims to provide attest services
shall pay a penalty of no less than $5,000.00 and no more than $25,000.00;
(6)
an unlicensed entity that claims to provide attest services
shall pay a penalty of no less than $5,000.00 and no more than $25,000.00;
(7)
an unlicensed individual who claims to be a certified public
accountant shall pay a penalty of no less than $5,000.00 and no more than
$25,000.00; and
(8)
an unlicensed entity that claims to be a certified public
accounting firm shall pay a penalty of no less than $5,000.00 and no more
than $25,000.00.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on March 18, 2004.
TRD-200402042
Rande Herrell
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: May 2, 2004
For further information, please call: (512) 305-7848
22 TAC §§519.1 - 519.14, 519.16, 519.17
(Editor's note: The text of the following sections proposed for
repeal will not be published. The sections may be examined in the offices
of the Texas State Board of Public Accountancy or in the Texas Register office,
Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)
The Texas State Board of Public Accountancy (Board)
proposes the repeal of Chapter 519, §519.1, concerning Purpose and Scope; §519.2,
concerning Computation of Time; §519.3, concerning Rulemaking Proceedings; §519.4,
concerning Conduct and Decorum; §519.5, concerning Ex Parte Consultations; §519.6,
concerning Informal Conferences and Informal Dispositions; §519.7, concerning
Administrative Penalties; §519.8, concerning Subpoenas; §519.9,
concerning Procedures after Hearing; §519.10, concerning The Record and
Assessment of Cost of Preparation; §519.11, concerning Follow-Up; §519.12,
concerning Publication of Disciplinary/Administrative Sanctions; §519.13,
concerning Mediation and Alternative Dispute Resolution; §519.14, concerning
Emergency Suspension; §519.16, concerning Misdemeanors that Subject a
Certificate or Registration Holder to Discipline by the Board; and §519.17,
concerning Administrative Penalty Guidelines.
These repeals are the result of rule review conducted pursuant to §2001.039
of the Government Code. Government Code §2001.039 requires that each
state agency review and consider for readoption each rule adopted by that
agency pursuant to the Government Code, Chapter 2001 (Administrative Procedure
Act). The Board published a Notice of Intention to Review Title 22, TAC, Part
22, Chapter 519 in the February 7, 2003, issue of the
Texas Register
(28 TexReg 1234). No comments were received following
publication of the notice.
The proposed repeal of Chapter 519 will remove these rules so they can
be replaced by re-written rules.
William Treacy, Executive Director of the Board, has determined that for
the first five-year period the proposed repeals will be in effect:
A. the additional estimated cost to the state expected as a result of enforcing
or administering the repeals will be zero because the repeals do not affect
costs.
B. the estimated reductions in costs to the state and to local governments
as a result of enforcing or administering the repeals will be zero because
the repeals do not affect costs.
C. the estimated loss or increase in revenue to the state as a result of
enforcing or administering the repeals will be zero because the repeals do
not affect revenue.
Mr. Treacy has determined that for the first five-year period the repeals
are in effect the public benefits expected as a result of adoption of the
proposed repeals will be that these rules will be replaced with re-written
rules that are current and applicable.
The probable economic cost to persons required to comply with the repeals
will be zero because the repeals do not affect economic costs.
Mr. Treacy has determined that a Local Employment Impact Statement is not
required because the proposed repeals will not affect a local economy.
The Board requests comments on the substance and effect of the proposed
repeals from any interested person. Comments must be received at the Board
no later than noon on Thursday, April 29, 2004. Comments should be addressed
to Rande Herrell, General Counsel, Texas State Board of Public Accountancy,
333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to her attention
at (512) 305-7854.
Mr. Treacy has determined that the proposed repeals will not have an adverse
economic effect on small businesses because the repeals do not have any economic
effect.
The Board specifically invites comments from the public on the issues of
whether or not the proposed repeals will have an adverse economic effect on
small business; if the repeals are believed to have such an effect, then how
may the Board legally and feasibly reduce that effect considering the purpose
of the statute under which the repeals are to be adopted; and if the repeals
are believed to have such an effect, how the cost of compliance for a small
business compares with the cost of compliance for the largest business affected
by the repeals under any of the following standards: (a) cost per employee;
(b) cost for each hour of labor; or (c) cost for each $100 of sales. See Texas
Government Code, §2006.002(c).
The repeals are proposed under the Public Accountancy Act ("Act"),
Texas Occupations Code, §901.151 which provides the agency with the authority
to amend, adopt and repeal rules deemed necessary or advisable to effectuate
the Act and §2001.039 of the Government Code Chapter 2001 (Administrative
Procedure Act) that requires that each state agency review and consider for
readoption each rule adopted by that agency.
No other article, statute or code is affected by these proposed repeals.
§519.1.Purpose and Scope.
§519.2.Computation of Time.
§519.3.Rulemaking Proceedings.
§519.4.Conduct and Decorum.
§519.5.Ex Parte Consultations.
§519.6.Informal Conferences and Informal Dispositions.
§519.7.Administrative Penalties.
§519.8.Subpoenas.
§519.9.Procedures after Hearing.
§519.10.The Record and Assessment of Cost of Preparation.
§519.11.Follow-Up.
§519.12.Publication of Disciplinary/Administrative Sanctions.
§519.13.Mediation and Alternative Dispute Resolution.
§519.14.Emergency Suspension.
§519.16.Misdemeanors that Subject a Certificate or Registration Holder to Discipline by the Board.
§519.17.Administrative Penalty Guidelines.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on March 18, 2004.
TRD-200402043
Rande Herrell
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: May 2, 2004
For further information, please call: (512) 305-7848
Subchapter A. GENERAL PROVISIONS
22 TAC §§519.1 - 519.9
The Texas State Board of Public Accountancy (Board) proposes
new rules §519.1 concerning Purpose and Scope; §519.2 concerning
Definitions; §519.3 Computation of Time; §519.4. concerning Conduct
and Decorum; §519.5. concerning Ex Parte Consultations; §519.6 concerning
Subpoenas; §519.7 concerning Misdemeanors that Subject a Certificate
or Registration Holder to Discipline by the Board, §519.8 concerning
Administrative Penalties and §519.9 concerning Administrative Penalty
Guidelines in Subchapter A concerning General Provisions.
New board rule §519.1 describes the purpose and scope of Chapter 519.
New board rule §519.2 contains the definitions needed to understand Chapter
519. New board rule §519.3 describes computation of time. New board rule §519.4
describes conduct and decorum in committee and board proceedings. New board
rule §519.5 addresses ex parte consultations. New board rule §519.6
describes the board’s new subpoena power. New board rule §519.7
lists the criminal offenses that involve dishonesty, fraud, moral turpitude
or alcohol abuse or controlled substances that directly relate to the practice
of accounting, including recidivism. New Board Rule 519.8, which is former
board rule 519.7, recreates the administrative penalties that may be assessed
against licenses. New board rule §519.9 contains guidelines for the assessment
of administrative penalties in disciplinary matters.
These new rules are the result of rule review conducted pursuant to §2001.039
of the Government Code. Government Code §2001.039 requires that each
state agency review and consider for readoption each rule adopted by that
agency pursuant to the Government Code, Chapter 2001 (Administrative Procedure
Act). The Board published a Notice of Intention to Review Title 22, TAC, Part
22, Chapter 519 in the February 7, 2003 issue of the
Texas Register
(28 TexReg 1234). No comments were received following
publication of the notice.
William Treacy, Executive Director of the Board, has determined that for
the first five-year period the proposed new rules will be in effect:
A. the additional estimated cost to the state expected as a result of enforcing
or administering the new rules will be zero for board rules §§519.1-519.5.
The cost for §519.8 will be zero because the rule is only being renumbered
and relocated. Because rules §519.6, §519.7 and §519.9 are
only a re-numbering of former rules §519.8, §519.16 and §519.17,
there is no additional cost/revenue.
B. the estimated reduction in costs to the state and to local governments
as a result of enforcing or administering the new rules will be zero because
the rules do not address reduction in costs.
C. the estimated loss or increase in revenue to the state as a result of
enforcing or administering the new rules will be zero loss because the rules
do not address revenue loss. Because rules §519.6, §519.7 and §519.9
are only a re-numbering of former rules §519.8, §519.16 and §519.17,
there is no additional cost/revenue.
Mr. Treacy has determined that for the first five-year period the new rules
are in effect the public benefits expected as a result of adoption of the
proposed new rules will be that these rules will be clearer and easier to
understand.
The probable economic cost to persons required to comply with the new rules
will be zero for board rules §§519.1-519.5. The cost for §519.8
will be zero because the rule is only being renumbered and relocated. Because
rules §519.6, §519.7 and §519.9 are only a re-numbering of
former rules §519.8, §519.16 and §519.17, there is no additional
cost.
Mr. Treacy has determined that a Local Employment Impact Statement is not
required because the proposed new rules will not affect a local economy.
The Board requests comments on the substance and effect of the proposed
new rules from any interested person. Comments must be received at the Board
no later than noon on Thursday, April 29, 2004. Comments should be addressed
to Rande Herrell, General Counsel, Texas State Board of Public Accountancy,
333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to her attention
at (512) 305-7854.
Mr. Treacy has determined that the proposed new rules will not have an
adverse economic effect on small businesses and will be zero.
The Board specifically invites comments from the public on the issues of
whether or not the proposed new rules will have an adverse economic effect
on small business; if the new rules are believed to have such an effect, then
how may the Board legally and feasibly reduce that effect considering the
purpose of the statute under which the new rules are to be adopted; and if
the new rules are believed to have such an effect, how the cost of compliance
for a small business compares with the cost of compliance for the largest
business affected by the new rules under any of the following standards: (a)
cost per employee; (b) cost for each hour of labor; or (c) cost for each $100
of sales. See Texas Government Code, §2006.002(c).
The new rules are proposed under the Public Accountancy Act ("Act"),
Texas Occupations Code, §901.151 which authorizes the Board to adopt
rules deemed necessary or advisable to effectuate the Act and §2001.039
of the Government Code Chapter 2001 (Administrative Procedure Act) that requires
that each state agency review and consider for readoption each rule adopted
by that agency.
No other article, statute or code is affected by these proposed new rules.
§519.1.Purpose and Scope.
Chapter 519 will govern the processes followed by the board in the
investigation and disposition of matters within the board’s jurisdiction.
These rules supplement, as appropriate, the Rules of Practice and Procedure
of the State Office of Administrative Hearings.
§519.2.Definitions.
In this chapter:
(1)
"Address of record" means the last address provided to
the board by a certificate or registration holder pursuant to board rule 501.93
of this title (relating to Responses);
(2)
"Administrative costs" means those costs actually incurred
by the board through payment to outside vendors and the reasonable value of
resources expended by the board in the investigation and prosecution of a
matter within the board’s jurisdiction, including but not limited to,
attorney’s fees and expenses, legal assistant’s fees and expenses,
expert fees and expenses, witness fees and expenses, filing fees, SOAH utilization
fees, court reporting fees, copying fees, delivery fees, case management fees,
costs of exhibit creation, technical fees, support personnel costs, associated
overhead costs and any other cost or fee that can be reasonably be attributed
to the matter;
(3)
"ALJ" means administrative law judge;
(4)
"APA" means the Texas Administrative Procedure Act, chapter
2001 of the Texas Government Code;
(5)
"Board staff" means the employees or independent contractors
of the board;
(6)
"Committee" means an enforcement committee of the board
which are the Behavioral Enforcement Committee, the Technical Standards Review
Committee and the Major Case Enforcement Committee;
(7)
"Complaint" means information available to or provided
to the board indicating that a certificate or registration holder may have
violated the Act, board rules, or order of the board;
(8)
"Complainant" means the person or entity who initiates
a complaint with board against a certificate or registration holder;
(9)
"PFD" means the proposal for decision prepared by an administrative
law judge;
(10)
"Respondent" means a certificate or registration holder
against whom a complaint has been filed; and
(11)
"SOAH" means the State Office of Administrative Hearings.
§519.3.Computation of Time.
In computing any period of time prescribed or allowed by this chapter,
by order of the board, or by any applicable statute, the period shall begin
on the day after the act or the event considered, and conclude on the last
day of such computed period, unless it be a Saturday, Sunday, or legal state
holiday, in which event the period runs until the end of the next day which
is not a Saturday, Sunday, or legal state holiday. If the triggering act or
event is a written communication from the board that is sent by registered
or certified mail, courier or public delivery service, facsimile transmission,
or electronic transmission (such as e-mail), the act or event is deemed to
have occurred on the date such communication was mailed, delivered to a courier
or delivery service, faxed or e-mailed to the last address, e-mail address
or facsimile number furnished to the board by the recipient.
§519.4.Conduct and Decorum.
(a)
Every party, witness, attorney, or other representative
appearing before the board, board Committees or board staff shall comport
himself in all proceedings with proper dignity, courtesy, and respect for
the board, the executive director, and all other participants. Disorderly
conduct will not be tolerated. Attorneys and other representatives of parties
shall observe and practice the standards of ethical behavior prescribed for
attorneys at law by the State Bar of Texas.
(b)
Any person engaging in disorderly conduct or communicating
with board members in violation of the prohibitions on ex parte communication
may be excluded from any board, Committee or staff proceeding and treated
as if defaulting on obligations to the board.
§519.5.Ex Parte Consultations
Unless required for the disposition of ex parte matters as authorized
by law, board members, committee members, or employees of the board assigned
to render a decision or make findings of fact and conclusion of law in a contested
case may not communicate, directly or indirectly, in connection with any issue
of fact or law with any party or his representative, except on notice and
with opportunity for all parties to participate.
§519.6.Subpoenas.
(a)
The executive director or his designated representative
is delegated authority to issue subpoenas to compel the attendance of relevant
witnesses or to compel the production of relevant documents, records and other
materials, maintained by electronic or other means in the furtherance of the
investigation of any matter within the jurisdiction of the board. The executive
director or his designated representative may administer oaths and take testimony
and other evidence from any person who is the subject of a subpoena issued
under this section in the furtherance of the investigation of any matter within
the jurisdiction of the board.
(b)
The executive director or his designated representative
is delegated authority to issue subpoenas authorized by the APA in contested
cases and the Act.
§519.7.Misdemeanors that Subject a Certificate or Registration Holder to Discipline by the Board.
(a)
Final conviction or placement on deferred adjudication
or community supervision in connection with misdemeanors that involve dishonesty
or fraud may subject a certificate or registration holder to disciplinary
action pursuant to §501.90 of this title (relating to Discreditable Acts).
Because a certificate or registration holder is often placed in a position
of trust with respect to client funds, and the public in general, and the
business community in particular, rely on the veracity, integrity and honesty
of certificate or registration holders in the preparation of reports and provision
of other accounting services, the board considers conviction or placement
on deferred adjudication or community supervision for any crime involving
dishonesty or fraud to relate directly to the practice of public accountancy
and may subject the certificate or registration holder to discipline by the
board. The board has determined that misdemeanor offenses that involve dishonesty
or fraud directly relate to the practice of accounting pursuant to Sections
53.021, 53.022, 53.023 and 53.025 of the Occupations Code. The following non-exclusive
list of misdemeanor offenses may involve dishonesty or fraud:
(1)
Theft;
(2)
Theft of Service;
(3)
Tampering with Identification Numbers;
(4)
Theft of or Tampering with Multichannel Video or Information
Services;
(5)
Manufacture, Distribution, or Advertisement of Multichannel
Video or Information Services Device;
(6)
Sale or Lease of Multichannel Video or Information Services
Device;
(7)
Possession, Manufacture, or Distribution of Certain Instruments
Used to Commit Retail Theft;
(8)
Forgery;
(9)
Criminal Simulation;
(10)
Trademark Counterfeiting;
(11)
Stealing or Receiving Stolen Check or Similar Sight Order;
(12)
False Statement to Obtain Property or Credit;
(13)
Hindering Secured Creditors;
(14)
Credit Card Transaction Record Laundering;
(15)
Issuance of Bad Check;
(16)
Deceptive Business Practices;
(17)
Rigging Publicly Exhibited Contest;
(18)
Misapplication of Fiduciary Property or Property of Financial
Institution;
(19)
Securing Execution of Document by Deception;
(20)
Fraudulent Destruction, Removal, or Concealment of Writing;
(21)
Simulating Legal Process;
(22)
Refusal to Execute Release of Fraudulent Lien or Claim;
(23)
Breach of Computer Security;
(24)
Unauthorized Use of Telecommunications Service;
(25)
Theft of Telecommunications Service;
(26)
Publication of Telecommunications Access Device;
(27)
Insurance Fraud;
(28)
False Alarm or Report;
(29)
Engaging in Organized Criminal Activity;
(30)
Violation of Court Order Enjoining Organized Criminal
Activity;
(31)
Unlawful Use of Criminal Instrument;
(32)
Unlawful Access to Stored Communications;
(33)
Burglary of Vehicles;
(34)
Burglary of Coin-Operated or Coin Collection Machines;
(35)
Coercion of Public Servant or Voter;
(36)
Improper Influence;
(37)
Gift to Public Servant by Person Subject to His Jurisdiction;
(38)
Offering Gift to Public Servant;
(39)
Perjury;
(40)
False Report to Peace Officer or Law Enforcement Employee;
(41)
Tampering With or Fabricating Physical Evidence;
(42)
Tampering With Governmental Record;
(43)
Fraudulent Filing of Financing Statement;
(44)
False Identification as Peace Officer;
(45)
Misrepresentation of Property;
(46)
Record of a Fraudulent Court; and
(47)
Bail Jumping and Failure to Appear.
(b)
Final conviction or placement on deferred adjudication
or community supervision in connection with misdemeanors that involve moral
turpitude may subject a certificate or registration holder to disciplinary
action pursuant to §501.90 of this title (relating to Discreditable Acts).
Because a certificate or registration holder is often placed in a position
of trust with respect to client funds, and the public in general, and the
business community in particular, rely on the veracity, integrity and honesty
of certificate or registration holders in the preparation of reports and provision
of other accounting services, the board considers conviction or placement
on deferred adjudication or community supervision for any crime involving
moral turpitude to relate directly to the practice of public accountancy and
may subject the certificate or registration holder to discipline by the board.
The board has determined that misdemeanor offenses that involve moral turpitude
directly relate to the practice of accounting pursuant to Sections 53.021,
53.022, 53.023 and 53.025 of the Occupations Code. The following non-exclusive
list of misdemeanor offenses may involve moral turpitude:
(1)
Prostitution;
(2)
Promotion of Prostitution;
(3)
Indecent Exposure;
(4)
Public Lewdness;
(5)
Obscenity;
(6)
Obscene Display or Distribution;
(7)
Sale, Distribution, or Display of Harmful Material to Minor;
(8)
Employment Harmful to Children; and
(9)
Abuse of a Corpse.
(c)
Final conviction or placement on deferred adjudication
or community supervision in connection with misdemeanors that involve alcohol
abuse or controlled substances may subject a certificate or registration holder
to disciplinary action pursuant to §501.90 of this title (relating to
Discreditable Acts). Because a certificate or registration holder is often
placed in a position of trust with respect to client funds, and the public
in general, and the business community in particular, rely on the veracity,
integrity and honesty of certificate or registration holders in the preparation
of reports and provision of other accounting services, the board considers
conviction or placement on deferred adjudication or community supervision
for any crime involving alcohol abuse or controlled substances to relate directly
to the practice of public accountancy and may subject a certificate or registration
holder to discipline by the board. The board has determined that misdemeanor
offenses that involve alcohol abuse or controlled substances directly relate
to the practice of accounting pursuant to Sections 53.021, 53.022, 53.023
and 53.025 of the Occupations Code. The following non-exclusive list of misdemeanor
offenses may involve alcohol abuse or controlled substances:
(1)
Possession of less than 28 grams of a controlled substance
listed in penalty group 3 under the Texas Penal Code;
(2)
Possession of less than 28 grams of a controlled substance
listed in penalty group 4 under the Texas Penal Code;
(3)
Manufacture, delivery or possession of a controlled substance
listed in a schedule of controlled substances, but not listed in a penalty
group under the Texas Penal Code;
(4)
Manufacture, delivery or possession of a controlled substance
analogue;
(5)
Possession or delivery of marihuana;
(6)
Possession or delivery of drug paraphernalia;
(7)
Possession or transport of chemicals with the intent to
manufacture a controlled substance; and
(8)
Any misdemeanor involving intoxication under the influence
of alcohol or a controlled substance.
(d)
Because a certificate or registration holder is often placed
in a position of trust with respect to client funds, and the public in general,
and the business community in particular, rely on the veracity, integrity
and honesty of certificate or registration holders in the preparation of reports
and provision of other accounting services, the board considers repeated violations
of any criminal law to relate directly to the practice of public accountancy.
(e)
A conviction or placement on deferred adjudication or community
supervision for a violation of any state or federal law that is equivalent
to an offense listed in subsections (a) through (d) of this section is considered
to directly relate to the practice of accounting and may subject a certificate
or registration holder to discipline by the board.
§519.8.Administrative Penalties.
(a)
The board may impose an administrative penalty alone or
in addition to other sanctions permitted under the Act. Board committees and
the executive director are delegated the authority to determine that any alleged
violation warrants an administrative penalty under Subchapter L of the Public
Accountancy Act.
(b)
The report of any such determination may be included in
a notice of hearing.
(c)
A request for a hearing under §901.554 of the Public
Accountancy Act shall clearly notify the staff that the hearing must address
issues relevant to the assessment of an administrative penalty by including
the language "RESPONDENT SPECIFICALLY REQUESTS A HEARING ON ADMINISTRATIVE
PENALTIES" in capital letters. Failure to include such language shall be a
waiver of the right to a hearing within the meaning of §901.554 of the
Public Accountancy Act.
(d)
Pursuant to §901.551 of the Public Accountancy Act:
(1)
the board imposes an administrative penalty on licensees
who, in violation of §901.411 of the Public Accountancy Act:
(A)
do not complete at least 120 hours of continuing professional
education in each three-year license period;
(B)
do not complete at least 20 hours in each one-year license
period;
(C)
do not comply with board rules for the reporting of continuing
professional education; or
(D)
fail to complete or report sufficient ethics hours as required
by board §523.63 of this title (relating to Mandatory Continuing Professional
Education Attendance).
(2)
considering the seriousness of violation of §901.411
of the Public Accountancy Act, the hazard and potential hazard to the public
from CPAs who are not trained in current accounting standards and practices,
the amount necessary to deter future violations, and such other matters as
the board considers justice may require, the board sets the administrative
penalty for the violations described in §519.7(d)(1) of this title (relating
to Administrative Penalties) at a minimum of $100 per licensee per license
period
(3)
the penalty may be assessed only on licensees against whom
a final board order is issued.
§519.9.Administrative Penalty Guidelines.
(a)
The following table contains guidelines for the assessment
of administrative penalties in disciplinary matters. In determining whether
a violation is minor, moderate or major, the board will apply the factors
to be considered set forth in §901.552(b) of the Public Accountancy Act.
In all cases where the board has determined a violation has occurred, administrative
costs will be assessed, regardless of any other sanction imposed by the board.
(b)
The amounts specified in subsection (a) of this section
are guidelines only. The board retains the right to increase or decrease the
amount of an administrative penalty based on the circumstances of each case
it considers.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on March 18, 2004.
TRD-200402044
Rande Herrell
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: May 2, 2004
For further information, please call: (512) 305-7848
22 TAC §§519.20 - 519.25
The Texas State Board of Public Accountancy (Board) proposes
new rules §519.20 concerning Complaints; §519.21 concerning Investigations; §519.22
concerning Committee Considerations; §519.23 concerning Informal Conferences, §519.24
concerning Committee Recommendations and §519.25 concerning Mediation
and Alternative Dispute Resolution in Subchapter B concerning Complaints and
Investigations.
The new rules §519.20 through §519.25 will describe the Board's
enforcement complaint, investigative, informal conference and committee procedures.
These new rules are the result of rule review conducted pursuant to §2001.039
of the Government Code. Government Code §2001.039 requires that each
state agency review and consider for readoption each rule adopted by that
agency pursuant to the Government Code, Chapter 2001 (Administrative Procedure
Act). The Board published a Notice of Intention to Review Title 22, TAC, Part
22, Chapter 519 in the February 7, 2003 issue of the
Texas Register
(28 TexReg 1234). No comments were received following
publication of the notice.
William Treacy, Executive Director of the Board, has determined that for
the first five-year period the proposed new rules will be in effect:
A. the additional estimated cost to the state expected as a result of enforcing
or administering the new rules will be zero because the new rules describe
current procedures; they do not create any new procedures.
B. the estimated reduction in costs to the state and to local governments
as a result of enforcing or administering the new rules will be zero because
the new rules describe current procedures; they do not create any new procedures.
C. the estimated loss or increase in revenue to the state as a result of
enforcing or administering the new rules will be zero because the new rules
describe current procedures; they do not create any new procedures.
Mr. Treacy has determined that for the first five-year period the new rules
are in effect the public benefits expected as a result of adoption of the
proposed new rules will be that the Board's enforcement complaint, investigative,
informal conference and committee procedures will be described for anyone
to read.
The probable economic cost to persons required to comply with the new rules
will be zero because the new rules describe current procedures; they do not
create any new procedures.
Mr. Treacy has determined that a Local Employment Impact Statement is not
required because the proposed new rules will not affect a local economy.
The Board requests comments on the substance and effect of the proposed
new rules from any interested person. Comments must be received at the Board
no later than noon on Thursday, April 29, 2004. Comments should be addressed
to Rande Herrell, General Counsel, Texas State Board of Public Accountancy,
333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to her attention
at (512) 305-7854.
Mr. Treacy has determined that the proposed new rules will not have an
adverse economic effect on small businesses because the new rules describe
current procedures; they do not create any new procedures.
The Board specifically invites comments from the public on the issues of
whether or not the proposed new rules will have an adverse economic effect
on small business; if the new rules are believed to have such an effect, then
how may the Board legally and feasibly reduce that effect considering the
purpose of the statute under which the new rules are to be adopted; and if
the new rules are believed to have such an effect, how the cost of compliance
for a small business compares with the cost of compliance for the largest
business affected by the new rules under any of the following standards: (a)
cost per employee; (b) cost for each hour of labor; or (c) cost for each $100
of sales. See Texas Government Code, §2006.002(c).
The new rules are proposed under the Public Accountancy Act ("Act"),
Texas Occupations Code, §901.151 which authorizes the Board to adopt
rules deemed necessary or advisable to effectuate the Act and §2001.039
of the Government Code Chapter 2001 (Administrative Procedure Act) that requires
that each state agency review and consider for readoption each rule adopted
by that agency.
No other article, statute or code is affected by these proposed new rules.
§519.20.Complaints.
(a)
Written complaints should contain information necessary
for the proper processing of the complaint by the board, including:
(1)
Complainant’s name, address and phone number;
(2)
name, address and phone number of the certificate or registration
holder against whom the complaint is filed;
(3)
description of the alleged violation;
(4)
supporting information and factual evidence;
(5)
names and addresses of witnesses; and
(6)
sources of other pertinent information.
(b)
The board has discretion whether or not to open an investigative
file. A complaint that does not contain all of the information requested in
subsection (a) of this section may be pursued if the missing information can
be obtained from another source. For the board to proceed it must have jurisdiction
over the person and the subject matter. Once the board has received a complaint,
board staff shall conduct an initial screening of the complaint within 30
days. The board staff shall notify the Complainant whether or not the board
will proceed with an investigation.
(c)
The board may accept anonymous complaints. Anonymous complaints
may not be investigated if insufficient information is provided, the allegations
are vague, appear to lack factual foundation, or cannot be proved for lack
of a witness or other evidence.
§519.21.Investigations.
(a)
A board investigative file will be opened when the board
determines that there may be a potential violation of the Act, board rules,
or board order and the subject matter of the complaint is within the board’s
jurisdiction.
(b)
The board may open an investigative file on its own initiative.
(c)
A certificate or registration holder shall cooperate with
the board in its investigation of a complaint. The Respondent will receive
notice of the investigation by certified mail return receipt requested at
the Respondent’s mailing address on file with the board. Upon notice
of an investigation from the board, the Respondent shall respond to the investigation
and any request by the board for information or records concerning the investigation
in accordance with §501.93 of this title (relating to Responses).
(d)
The Respondent must provide the board with a detailed response
to each allegation and the request for background information contained in
the notice of investigation. The response must be in writing and delivered
to the board within 30 days of the date of the notice of the investigation.
The Respondent’s response may include any additional information the
Respondent wants the board to consider.
(e)
The board will provide the Respondent and the Complainant
with quarterly notification of the status of an investigation.
(f)
The board may request information from a certificate or
registration holder who is not the subject of an investigation.
(g)
Withdrawal of a complaint by a Complainant does not automatically
cease an ongoing investigation.
§519.22.Committee Considerations.
(a)
Each investigation shall be submitted to the appropriate
Committee for an initial determination as to whether a violation has occurred.
The Committee shall make a recommendation as to the appropriate disposition
of the investigation.
(b)
The Committee, in its sole discretion, may abate the investigation.
(c)
Cases that do not require Committee consideration will
not be presented to a Committee.
§519.23.Informal Conferences.
(a)
The Committee, at its sole discretion, may invite the Respondent
and the Complainant to an informal conference. The purpose of the conference
is to assist the Committee in the investigation. An informal conference is
voluntary and is not a prerequisite to a hearing in a disciplinary action.
(b)
The Committee will request the Respondent to appear at
a specified time and place for an informal conference. If the Committee determines
that the Complainant’s presence will aide in the investigation, then
the Committee will invite the Complainant to appear at the informal conference.
(c)
The notice of an informal conference will state the date,
time and place of the informal conference. The notice will be mailed to the
Respondent and Complainant at least 10 days prior to the informal conference.
(d)
At an informal conference, the Respondent may appear in
person and with counsel.
(e)
During an informal conference, each party is given the
opportunity to make a brief presentation to the Committee. The Committee may
ask questions regarding the matter being investigated and any matter of interest
to the Committee. The Committee chair may call upon board staff at any time
for assistance during the informal conference.
(f)
The Committee may invite a non-party who has relevant information
to the investigation to participate in the informal conference.
§519.24.Committee Recommendations.
(a)
At the conclusion of its investigation the Committee will
make a recommendation to the board regarding the disposition of the investigation.
(b)
If the Committee determines the board no longer has jurisdiction,
there is insufficient evidence of a violation of the Act or the Rules or the
Respondent comes into compliance with the Act or Rules, the Committee will
recommend dismissal of the complaint. The Committee will inform the Respondent
of its recommendation and may issue a letter of comment stating the Committee’s
concerns about Respondent’s practice and make suggestions that may improve
Respondent’s practice. The Committee’s recommendation of dismissal
is not final until it is ratified by the board in an open meeting.
(c)
If the Committee determines that there is a violation of
the Act or Rules, the Committee will recommend appropriate disciplinary action.
The Committee may recommend any disciplinary sanction provided in Section
901.501 of the Act, singularly or any combination. The Respondent will be
informed of the Committee’s action.
(d)
In the appropriate case, the Committee will offer to enter
into an agreed consent order with the Respondent. The agreed consent order
shall contain the Committee’s factual findings and conclusions, and
the recommended terms and conditions for final resolution of the matter. The
Respondent will have 30 days to accept or reject the agreed consent order
in accordance with §519.3 of this title (relating to Computation of Time).
A rejection must be made in writing; however, failure to accept or reject
the proposed agreed consent order within the 30 day period will be deemed
a rejection. An agreed consent order is not final until it has been ratified
by the board in an open meeting. If the agreed consent order is rejected the
matter will be referred to SOAH for a contested case hearing.
§519.25.Mediation and Alternative Dispute Resolution.
(a)
It is the board's policy to encourage the resolution and
early settlement of all disputed matters, internal and external, through voluntary
settlement procedures.
(b)
The executive director shall designate a board employee
as the board's Alternative Dispute Resolution Director to perform the following
functions:
(1)
maintain necessary agency records of alternative dispute
resolution procedures while maintaining the confidentiality of participants;
(2)
establish a method for the appointment of impartial third
party mediators, moderators or arbitrators for alternative dispute resolution
proceedings;
(3)
provide information about available alternative dispute
resolution processes to agency employees, potential users, and users of the
alternative dispute resolution program;
(4)
arrange training or education necessary to implement alternative
dispute resolution processes; and
(5)
establish a system to evaluate the alternative dispute
resolution program and mediators.
(c)
The board, a committee of the board, a respondent in a
disciplinary matter pending before the board, the executive director of the
board or a board employee engaged in a dispute with the executive director
may request that a contested matter be submitted for alternative dispute resolution
through mediation as described in §154.023 of the Texas Civil Practice
and Remedies Code, moderated settlement conference as described in §154.025
of the Texas Civil Practice and Remedies Code, and non-binding arbitration
as described in §154.027 of the Texas Civil Practice and Remedies Code
by making a written request for alternative dispute resolution that states
the type of alternative dispute resolution requested and sets forth the issues
to be submitted for alternative dispute resolution. A respondent in a disciplinary
proceeding may not request mediation until a recommendation regarding that
disciplinary matter has been made a Committee of the board. The request must
be delivered to the Alternative Dispute Resolution Director at the board's
office.
(d)
The party who requests alternative dispute resolution shall
pay the cost of the impartial third party mediator, moderators or arbitrators
and shall otherwise bear their own costs of alternative dispute resolution.
(e)
Any resolution reached as a result of an alternative dispute
resolution procedure is intended to be through the voluntary agreement of
all of the parties. The resolution of a contested matter reached as a result
of an alternative dispute resolution procedure must be in writing, signed
by all of the parties, and is enforceable in the same manner as any other
written contract; provided however, that any signed resolution that purports
to bind the board must be ratified by the board and may be made public depending
upon the terms of the agreed resolution.
(f)
A communication relating to the subject matter made by
a party in an alternative dispute resolution procedure is confidential, is
not subject to disclosure, and may not be used as evidence in any further
proceeding. Any notes or record made of an alternative dispute resolution
procedure are confidential, and parties, including impartial third party mediators,
moderators, or arbitrators may not be required to testify in any proceedings
relating to or arising out of the matter in dispute or be subject to process
requiring disclosure of confidential information or data relating to or arising
out of the matter in dispute or under consideration. An oral communication
or written material used in or made a part of an alternative dispute resolution
procedure is admissible or discoverable only if it is admissible or discoverable
independent of the procedure. If this section conflicts with other legal requirements
for disclosure of communications or materials, the issue of confidentiality
may be presented to a judge or administrative law judge in Travis County,
Texas to determine, in camera, whether the facts, circumstances, and context
of the communications or materials sought to be disclosed warrant a protective
order or whether the communications or materials are subject to disclosure.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on March 18, 2004.
TRD-200402045
Rande Herrell
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: May 2, 2004
For further information, please call: (512) 305-7848
22 TAC §§519.40 - 519.53
The Texas State Board of Public Accountancy (Board) proposes
new rules §519.40 concerning General Provisions; §519.41 concerning
Pleadings in Contested Cases; §519.42 concerning Service in SOAH Proceedings; §519.43
concerning Emergency Suspension; §519.44 concerning Default; §519.45
concerning Discovery; §519.46 concerning Official Notice and Business
Records Affidavit; §519.47 concerning Waiver of Privilege/Confidentiality, §519.48
concerning Final Witness List, §519.49 concerning Exhibits, §519.50
concerning Reporter and Transcripts, §519.51 concerning Evidence, §519.52
concerning Motions and §519.53 concerning Dismissal by the Board.
The new rules §519.40 through §519.53 describe the procedures
for proceedings at the State Office of Administrative Hearings ("SOAH"). While
all of the rules are new, most of them describe the current actual practice
and supplement SOAH’s procedural rules and the Texas Rules of Civil
Procedure. Rule 519.40 appoints SOAH to hear the Board’s case. Rule
519.41 describes the contents of pleadings in contested cases, the procedure
and applicable time limits and contains language for default proceedings.
Rule 519.42 requires service according to SOAH’s rules. Rule 519.43
is former rule 519.14, and it describes emergency suspension procedures and
the Executive Committee’s role. Rule 519.44 describes default proceedings.
Rule 519.45 describes the several available discovery procedures and deadlines.
Rule 519.46 describes the official notice and business records affidavit procedures
and filing schedules. Rule 519.47 describes waiver of privilege and confidentiality
in discovery proceedings. Rule 519.48 describes the procedure and deadline
for designation of witnesses and final witness list. Rule 519.49 describes
the procedure and deadlines for exhibits. Rule 519.50 addresses court reporters
and transcripts of the hearings. Rule 519.51 describes the evidentrary rules
that are applicable. Rule 519.52 applies SOAH's rules to Motions. Rules 519.53
allows the Board to dismiss a complaint at anytime.
These new rules are the result of rule review conducted pursuant to §2001.039
of the Government Code. Government Code §2001.039 requires that each
state agency review and consider for readoption each rule adopted by that
agency pursuant to the Government Code, Chapter 2001 (Administrative Procedure
Act). The Board published a Notice of Intention to Review Title 22, TAC, Part
22, Chapter 519 in the February 7, 2003 issue of the
Texas Register
(28 TexReg 1234). No comments were received following
publication of the notice.
William Treacy, Executive Director of the Board, has determined that for
the first five-year period the proposed new rules will be in effect:
A. the additional estimated cost to the state expected as a result of enforcing
or administering the new rules will be about $300 per year caused by emergency
suspension and additional paperwork in pleadings, discovery and pre-trial
filings.
B. the estimated reduction in costs to the state and to local governments
as a result of enforcing or administering the new rules will be about $300
per year to the state created by the rules’ streamlining of pleadings,
discovery, pre-trial filings and default procedure.
C. the estimated loss or increase in revenue to the state as a result of
enforcing or administering the new rules will be zero because the rules do
not address revenue.
Mr. Treacy has determined that for the first five-year period the new rules
are in effect the public benefits expected as a result of adoption of the
proposed new rules will be that the proceedings at SOAH will be streamlined.
The probable economic cost to persons required to comply with the new rules
will be about $10 per year, but only for a very small number of licensees
that proceed to a hearing before an Administrative Law Judge of SOAH.
Mr. Treacy has determined that a Local Employment Impact Statement is not
required because the proposed new rules will not affect a local economy.
The Board requests comments on the substance and effect of the proposed
new rules from any interested person. Comments must be received at the Board
no later than noon on Thursday, April 29, 2004. Comments should be addressed
to Rande Herrell, General Counsel, Texas State Board of Public Accountancy,
333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to her attention
at (512) 305-7854.
Mr. Treacy has determined that the proposed new rules will not have an
adverse economic effect on small businesses because the cost will only be
about $10 per year and this cost is applicable to a very small number of licensees
that proceed to a hearing before an Administrative Law Judge of SOAH.
The Board specifically invites comments from the public on the issues of
whether or not the proposed new rules will have an adverse economic effect
on small business; if the new rules are believed to have such an effect, then
how may the Board legally and feasibly reduce that effect considering the
purpose of the statute under which the new rules are to be adopted; and if
the new rules are believed to have such an effect, how the cost of compliance
for a small business compares with the cost of compliance for the largest
business affected by the new rules under any of the following standards: (a)
cost per employee; (b) cost for each hour of labor; or (c) cost for each $100
of sales. See Texas Government Code, §2006.002(c).
The new rules are proposed under the Public Accountancy Act ("Act"),
Texas Occupations Code, §901.151 which authorizes the Board to adopt
rules deemed necessary or advisable to effectuate the Act, §2001.039
of the Government Code Chapter 2001 (Administrative Procedure Act) that requires
that each state agency review and consider for readoption each rule adopted
by that agency and §519.43 is also proposed under §901.5045 of the
Act regarding Emergency Suspension.
No other article, statute or code is affected by these proposed new rules.
§519.40.General Provisions.
(a)
The board appoints SOAH to be its finder of fact in contested
cases pursuant to section 901.508 of the Act. The board does not delegate
to the ALJ and retains for itself the right to make the final decision in
any contested case.
(b)
SOAH hearings of contested cases shall be conducted in
accordance with the APA by an ALJ assigned by SOAH. Jurisdiction over the
case is acquired by SOAH when the board staff files a complaint.
§519.41.Pleadings in Contested Cases.
(a)
A complaint filed by the board with SOAH shall include
information that alleges a certificate or registration holder has committed
a violation of the Act. The complaint shall be assigned a docket number and
an ALJ and shall be filed before or contemporaneously with the notice of hearing.
The complaint shall include:
(1)
a statement of the legal authority and jurisdiction under
which the hearing is to be held;
(2)
a reference to the particular sections of the statutes
and rules involved;
(3)
a short, plain statement of the matters asserted; and
(4)
the following language in at least 12-point bold type:
"If you do not file a written answer to this complaint with the State Office
of Administrative Hearings within 20 days of the date the complaint was mailed,
the board may request the matter be remanded to the board for final disposition
and all of the matters alleged in the complaint will be deemed admitted as
true. A copy of any response you file with the State Office of Administrative
Hearings shall also be provided to the staff attorney for the Texas State
Board of Public Accountancy whose name appears on the complaint."
(b)
The Notice of Hearing shall include:
(1)
a statement of the time and place of the hearing;
(2)
a statement of the nature of each charge against the Respondent;
and
(3)
the following language in at least 12 point bold type:
"If you fail to attend the hearing, the factual allegations contained in the
complaint and any amendments to the complaint will be deemed as true, and
the relief sought in the complaint and any amendments to the complaint may
be granted by default and a default judgment entered against you, which may
include any or all of the requested sanctions, including the revocation of
your certificate or registration".
(c)
The Respondent shall file a written answer with SOAH within
20 days of the date the complaint or amended complaint was sent to Respondent
as computed under §519.3 of this title (relating to Computation of Time).
The answer shall include a short, plain statement of the Respondent’s
defenses to each claim asserted and shall admit or deny each allegation contained
in the complaint. If the Respondent is without knowledge or information sufficient
to form a belief as to the truth of an allegation, the Respondent shall so
state and this has the effect of a denial. When a Respondent intends in good
faith to deny only a part or a qualification of an allegation, the Respondent
shall specify so much of it as is true and material and shall deny only the
remainder.
(d)
Factual and legal allegations by the board in a complaint
or amended complaint are admitted when not denied in the Respondent’s
answer or amended answer.
(e)
All amended pleadings shall be filed no later than 20 days
prior to the hearing date. Any amended pleading filed after that date shall
be null and void, and have no effect unless otherwise ordered by the ALJ,
upon a showing of good cause and lack of harm to the opposing party.
§519.42.Service in SOAH Proceedings.
A copy of every document filed by a Respondent with SOAH shall also
be served on the board’s staff attorney assigned to the Respondent’s
case in accordance with SOAH’s rules.
§519.43.Emergency Suspension.
(a)
Whenever the board, through its Executive Committee, determines
that a certificate or registration holder is engaged in or about to engage
in an act of fraud or a violation of the Act and the certificate or registration
holder's continued practice constitutes an immediate threat to the public
welfare, the board, through its Executive Committee, may issue an order temporarily
suspending the certificate or registration holder’s license without
notice and without a hearing. An order temporarily suspending a license issued
by the Executive Committee must be ratified by the board at its next regularly
scheduled meeting.
(b)
"Immediate threat to the public welfare" means a real and
present danger to clients caused through the certificate or registration holder's
lack of competence, impaired status, or failure to adequately service clients.
A "real and present danger" exists if clients have a likely exposure to or
significant risk of loss of funds or records or financial injury and is based
on actual actions or inactions of the certificate or registration holder.
The Executive Committee may consider information that the certificate or registration
holder previously committed similar actions or inactions in determining whether
the certificate or registration holder poses an immediate threat to commit
such actions or inactions in the future.
(c)
Pursuant to Chapter 551 of the Texas Government Code (relating
to Open Meetings), the Executive Committee may hold a meeting by telephone
conference call if immediate action is required and the convening at one location
of the Executive Committee is inconvenient for any member of the Committee.
Whenever possible, the Executive Committee will attempt to provide the certificate
or registration holder with notice and an opportunity to be present at the
emergency suspension proceeding.
(d)
The determination of the Executive Committee may be based
not only on evidence admissible under the Texas Rules of Evidence, but may
be based on information of a type on which a reasonably prudent person commonly
relies in the conduct of the person's affairs. Presentations by the parties
may be based on evidence or information and shall not be excluded on objection
of a party unless determined by the chair that the evidence or information
is clearly irrelevant or unduly inflammatory in nature; however, objections
by a party may be noted for the record. Witnesses may provide sworn statements
in writing or verbally and may choose to provide statements that are not sworn.
However, whether a statement is sworn may be a factor to be considered by
the Executive Committee in evaluating the weight to be given to the statement.
Questioning of witnesses by board staff, the Respondent or Executive Committee
members is under the control of the Executive Committee chair.
(e)
The Executive Committee shall immediately serve notice
of the suspension on the certificate or registration holder in accordance
with section 901.5045(b) of the Act. The suspended certificate or registration
holder shall be provided the opportunity to request a hearing in accordance
with §901.5045(c) of the Act. The hearing shall be conducted in the manner
of a contested case pursuant to the Act, the APA, the board’s rules
and SOAH’s rules; provided that time limits provided in §901.5045(c)
of the Act shall control. At the close of the hearing, the ALJ shall recommend
to the Executive Committee whether to uphold, vacate or modify the suspension
order. If the ALJ’s recommendation is to vacate the emergency suspension
order, the Executive Committee shall determine whether to adopt that recommendation
no later than the second day after it receives that recommendation.
§519.44.Default.
(a)
The failure of the Respondent to timely file a written
response as provided in §519.41(c) of this title (relating to Pleadings
in Contested Cases) shall constitute a waiver of the right to a hearing and
entitles the board to render a final order disposing of the complaint without
further hearing. The ALJ shall grant any motion by the board to remand the
matter to the board for final disposition. In such instances, the factual
and legal allegations contained in the complaint or amended complaint shall
be deemed by the board to be true and the board shall act accordingly.
(b)
Failure of the Respondent to appear in person or by legal
representative on the day and at the time set for a final hearing on the merits
of a contested case, regardless of whether a written response has been filed,
shall entitle the board to a default judgment.
(c)
After remand to the board upon default or entry of a default
judgment by the ALJ, the Respondent may file a motion to set aside the remand
or default order and reopen the record. The motion to set aside the remand
or default judgment shall be granted if the Respondent establishes that the
failure to file a written response or to attend the hearing was neither intentional
nor the result of conscious indifference, and that such failure was due to
a mistake or accident.
§519.45.Discovery.
(a)
Matters subject to discovery are limited to those that
are relevant and material to, or reasonably calculated to lead to the discovery
of matters relevant and material to, issues within the board’s jurisdiction
as set out in the Act.
(b)
Not later than 20 days after receiving a written request
from an opposing party, the responding party shall provide to the requesting
party the following information:
(1)
the correct names of the parties to the lawsuit;
(2)
the name, address, and telephone number of any potential
parties;
(3)
the legal theories and, in general, the factual bases of
the responding party’s claims or defenses;
(4)
the name, address, and telephone number of persons having
knowledge of relevant facts, and a brief statement of each identified person's
connection with the case;
(5)
for any testifying expert:
(A)
the expert’s name, address, and telephone number;
(B)
the subject matter on which the expert will testify;
(C)
the general substance of the expert's mental impressions
and opinions and a brief summary of the basis for them, or if the expert is
not retained by, employed by, or otherwise subject to the control of the responding
party, documents reflecting such information; and
(D)
if the expert is retained by, employed by, or otherwise
subject to the control of the responding party:
(i)
all documents, tangible things, reports, models, or data
compilations that have been provided to, reviewed by, or prepared by or for
the expert in anticipation of the expert's testimony; and
(ii)
the expert’s current resume and bibliography;
(6)
any witness statements.
(c)
The parties may use the following methods of discovery:
(1)
requests for admissions and genuineness of documents as
permitted by SOAH’s rules:
(2)
interrogatories as permitted by SOAH’s rules, which
must be sworn to in accordance with Texas Rule of Civil Procedure 197.2;
(3)
requests for production as permitted by SOAH’s rules;
(4)
deposition on written questions as provided for in the
Texas Rules of Civil Procedure;
(5)
oral depositions taken in accordance with the Act and the
board’s rules; and
(6)
other forms of discovery as provided for in the APA and
SOAH’s rules.
(d)
The board may request production of documents and tangible
items that are identified in a discovery response, but a copy of which was
not provided with the response, in accordance with §501.93 of this title
(relating to Responses). The board shall make available requested documents
and tangible items which it has no objection to providing for inspection and
copying at the board’s offices. The board, in its sole discretion, may
provide a copy of the requested documents and tangible items for a reasonable
charge.
(e)
The taking and use of depositions shall be governed by
the APA or by an agreement between the parties either on the record or in
a writing signed by the parties or their representatives. Except by an agreement
between the parties either on the record or in a writing signed by the parties
or their representatives or by order of the ALJ, depositions shall be conducted
and completed no later than 30 days prior to the scheduled hearing date. Failure
of a properly noticed witness who is a party to the case to attend a deposition
for the purpose of taking the testimony of that party witness, or the failure
of such a witness to attend such a deposition as agreed to by the parties
on the record or in a writing signed by the parties or their representatives,
may result in the imposition of the sanctions and remedies set forth in paragraph
(g) of this section.
(f)
In the event that, as provided for in the APA, an original
deposition transcript is not returned by a deponent or a deponent's counsel,
or is not filed by a deponent, a deponent’s counsel, or other individual,
officer, or entity in possession of or last known to be in possession of the
original transcript, a party to the contested case pending before SOAH shall
be entitled to have a certified true copy of the deposition transcript filed
under seal at the board by the officer or a court reporter who transcribed
the deposition testimony or their designee. Such a copy shall be presumed
to be authentic unless an objecting party is able to rebut such a presumption
by a preponderance of competent evidence.
(g)
In the event of a failure by a party to comply with a discovery
request, to the extent required by the board’s rules, SOAH’s rules,
the APA, or as agreed to between the parties in a discovery agreement, the
ALJ shall, after notice and hearing, make such orders in regard to the failure
as are just, and issue one or more of the following orders:
(1)
an order granting a continuance;
(2)
an order limiting or restricting the admissibility and
use of evidence, to include exclusion of evidence or testimony;
(3)
an order requiring the non-compliant party to pay the requesting
party’s attorney’s fees, hearing and court reporter costs, and
actual costs for participation in the discovery process, incurred as a result
of a failure of the non-compliant party to abide by the discovery requirements;
(4)
an order imposing a scheduling order providing for discovery
deadlines necessary to remedy the failure to comply with discovery requirements
under the board’s rules;
(5)
an order for remedies and sanctions agreed to by the parties
in writing or on the record;
(6)
an order disallowing further discovery of any kind or of
a particular kind by the offending party;
(7)
an order holding that designated facts be considered admitted
for purposes of the proceeding;
(8)
an order refusing to allow the offending party to support
or oppose a designated claim or defense or prohibiting the party from introducing
designated matters into evidence;
(9)
an order disallowing in whole or in part requests for relief
by the offending party and excluding evidence in support of those requests;
or
(10)
an order striking pleadings or testimony, or both, in
whole or in part.
(h)
A showing of good cause for failure to comply with a discovery
request to the extent required by the board’s rules, SOAH’s rules,
the APA, or as agreed to between the parties in a discovery agreement, may
justify the imposition of less severe remedies or sanctions which might otherwise
be imposed. Good cause shall include but is not limited to the following:
(1)
lack of knowledge of the existence of the information or
material;
(2)
lack of access to or control of the information or material;
and
(3)
act of nature.
(i)
The discovery requirements governing SOAH proceedings may
be modified by agreement of the parties either on the record or in writing
signed by the parties or their representatives without approval of an ALJ.
(j)
All discovery shall be completed no later than 30 days
before the date set for a final hearing on the merits. All discovery requests
shall be served in a timely manner to allow for a timely response prior to
the end of the discovery period.
(k)
The discovery requirements and time limitations set by
the board’s rules and SOAH’s rules may be modified by the ALJ
only upon a showing of good cause and lack of harm to the opposing party made
pursuant to the motion of the party seeking the modification.
(l)
Upon receiving new information or material, or upon otherwise
determining that an inaccuracy exists in a previous discovery response, each
party shall supplement such responses as soon as practicable.
§519.46.Official Notice and Business Records Affidavit.
No later than 15 days prior to the date of the hearing, the parties
shall exchange lists specifying all matters which each party will seek to
have officially noticed at the hearing and shall file their business records
with accompanying affidavits with SOAH.
§519.47.Waiver of Privilege/Confidentiality.
The provision of any information or material in response to a discovery
request which may be the subject of a privilege or confidentiality requirement
under the Act or other applicable law, including but not limited to the accountant/client
privilege, physician/patient privilege, mental health provider privilege,
shall not constitute a waiver of any such privilege or confidentiality requirement
for any other purpose.
§519.48.Final Witness List.
(a)
A party must designate all expert witnesses within 20 days
of receipt of a written request to do so, unless otherwise determined by the
ALJ upon motion for good cause. In no event may a party designate an expert
witness less than 60 days prior to the date of the final hearing on the merits.
The party who designates an expert shall make the designated expert available
for deposition within a reasonable time period prior to the end of the discovery
period as provided in §519.44(j) of this title (relating to Default).
(b)
No later than 60 days prior to the date of the hearing,
the parties shall exchange final lists identifying the names and last known
addresses and phone numbers of all non-expert witnesses each party intends
to call to testify in its case-in-chief.
(c)
No witness may be included on a list made pursuant to subsections
(a) and (b) of this section that has not previously been identified in response
to a request for information made pursuant to §519.45(b) of this title
(relating to Discovery), if such a request has been made. Any person not timely
identified pursuant to subsection (a) and (b) of this section will not be
allowed to testify.
(d)
For each witness that is to appear by deposition, the party
offering the deposition testimony must designate in a list to be filed with
SOAH and served on the opposing parties not later than the tenth day before
the date scheduled for the final hearing the portions of any deposition to
be offered at the final hearing.
§519.49.Exhibits.
(a)
All exhibits that a party intends to offer at the final
hearing, except those offered solely for impeachment, must be marked with
a label that identifies the exhibit by the number under which it will be offered
at the final hearing and must be exchanged with the opposing parties not later
than the tenth day before the date scheduled for the final hearing. At least
ten days before the date scheduled for the final hearing, each party must
file with SOAH and deliver to the opposing parties a separate list of the
exhibits to be offered at the final hearing, separately identifying those
which the party expects to offer and those which the party may offer if the
need arises.
(b)
Objections to the admissibility of exhibits must be made
at least five days before the final hearing by filing written objections with
SOAH that include copies of the disputed exhibits and authority to support
the objection. The opposing parties may file a written response with SOAH
that includes authority to support the admission of the disputed exhibits.
At the beginning of the final hearing the ALJ shall admit all timely exchanged
and listed exhibits of any party to which there has been no objection and
rule on the objections to the admission of exhibits. If at any time during
the hearing it becomes apparent that the initial ruling on an objection was
incorrect, the ALJ on his own motion, or the motion of any party made re-consider
the initial ruling and admit or exclude the disputed exhibit. Failure to timely
object to an exhibit in writing under this subsection concedes the authenticity
of the exhibit.
§519.50.Reporter and Transcripts.
(a)
Each contested hearing may be recorded. Any recording of
contested case proceedings shall be conducted in accordance with the APA and
SOAH’s rules.
(b)
A stenographic reporter may sell copies of a transcript.
If the Respondent in the proceedings requests the original record of the testimony
and evidence received during a disciplinary hearing, the costs for the original
record shall be borne by the Respondent. When no party requests a transcript,
but the ALJ requests a court reporter to prepare a transcript, SOAH shall
bear the cost of any transcript requested by the ALJ unless the board agrees
to pay the cost or assess the cost as allowed. Any subsequent copies of the
record shall be borne by the person requesting the copy.
(c)
Suggested corrections to the transcript of the record may
be offered within ten days after the transcript is filed in the proceeding.
The parties may agree in writing or the ALJ may order a longer period for
corrections to the transcript of record to be offered thereafter. Suggested
corrections shall be served in writing upon each party of record, the official
reporter, and the ALJ. If suggested corrections are not objected to within
ten days of receipt, the ALJ will direct the corrections to be made and the
manner of making them. If the parties disagree on suggested corrections, the
party requesting the correction may request a hearing before the ALJ who shall
then determine the manner in which the record shall be changed, if at all.
§519.51.Evidence.
(a)
The rules of evidence as applied in nonjury civil cases
in a district court of this state shall be followed, except that evidence
inadmissible under those rules may be admitted if it meets the standards set
out in section 2001.081 of the APA. In all cases, irrelevant, immaterial,
or unduly repetitious evidence shall be excluded.
(b)
Objections to physical evidence shall be made in conformity
with section 519.49(b) of this title (relating to Exhibits). Objections to
oral evidence shall be made and shall be noted in the record. Formal exceptions
to rulings of the ALJ during a hearing shall be unnecessary. It shall be sufficient
that the party at the time any ruling is made or sought shall have made known
to the ALJ the requested action.
(c)
If evidence is excluded from the record by a ruling of
the ALJ, the evidence may be included in the record by an offer of proof made
by the sponsoring party by dictating into the record or submitting in writing
the substance of the evidence. An offer of proof shall be sufficient to preserve
the evidence for review.
(d)
When subpoenaed by the board, unless stipulated by the
parties, the office records of each Respondent shall have stapled thereto
an affidavit in the form approved and furnished by the board which contains
the requisite elements to comply with the Texas Rule of Evidence 902 (10)(b),
relating to form of affidavits for business records.
(e)
In accordance with section 2001.081 of the APA and consistent
with §901.502(10) of the Act and chapter 53 of the Texas Occupations
Code, deferred adjudications are admissible as evidence that the Respondent
violated the law with which the Respondent was charged and pled to, which
gave rise to the deferred adjudication.
§519.52.Motions.
Any motion filed during the pendency period of a hearing shall be filed
with SOAH in accordance with its rules.
§519.53.Dismissal by the Board.
The board may dismiss a complaint at any time, even after hearing or
issuance of a proposal for decision if the matter is currently pending at
SOAH. The dismissal is effective immediately upon the board giving notice
of the dismissal. If the matter is pending at SOAH at the time of the dismissal,
the board shall file the notice of dismissal with SOAH and the ALJ assigned
to the matter shall promptly enter an order of dismissal without prejudice.
The board may not impose a sanction on a certificate or registration holder
based on a dismissed complaint.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on March 18, 2004.
TRD-200402046
Rande Herrell
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: May 2, 2004
For further information, please call: (512) 305-7848
this chapter,
] shall have the following meanings,
unless the context clearly indicates otherwise. The masculine shall be construed
to include the feminine or neuter and vice versa, and the singular shall be
construed to include the plural and vice versa.
--The
]
Public Accountancy Act, Chapter 901, Occupations Code
;
[
.
]
--A
] message which is transmitted to persons by, or at the direction of,
a certificate or registration holder and which has reference to the availability
of the certificate or
registration
[
license
] holder
to perform Professional Services
;
[
.
]
--An
] entity controlling or being controlled by or under common control
with another entity, directly or indirectly, through one or more intermediaries
;
[
.
]
.
]
--The
]
Texas State Board of Public Accountancy
;
[
.
]
--The
] holders of all currently valid:
.
]
--An
] organization which has been granted tax-exempt status under the
Internal Revenue Code of 1986, §501(c), as amended
;
[
.
]
--A
]
person who enters into an agreement with a license holder or a license holder's
employer to receive a professional accounting service
;
[
.
]
.
]
--Compensation
] for recommending or referring any product or service
to be supplied by another person
;
[
.
]
--A
] fee for any service where no fee will be charged unless a specified
finding or result is attained, or in which the amount of the fee is otherwise
dependent upon the finding or result of such service. However, a certificate
or registration holder's non-Contingent fees may vary depending, for example,
on the complexity of the services rendered. Fees are not contingent if they
are fixed by courts or governmental entities acting in a judicial or regulatory
capacity, or in tax matters if determined based on the results of judicial
proceedings or the findings of governmental agencies acting in a judicial
or regulatory capacity, or if there is a reasonable expectation of substantive
review by a taxing authority
;
[
.
]
--A
] presentation of financial data, including accompanying notes, derived
from accounting records and intended to communicate an entity's economic resources
or obligations at a point in time, or the changes therein for a period of
time, in accordance with generally accepted accounting principles. Incidental
financial data to support recommendations to a client or in documents for
which the reporting is governed by Statements or Standards for
Attestation
[
attestation
] Engagements and tax returns and supporting
schedules do not constitute financial statements for the purposes of this
definition
;
[
.
]
--A
] proprietorship,
partnership,
limited liability partnership, limited liability company,
or professional or other corporation, or other business engaged in
the practice of public accountancy
;
[
.
]
--Compliance
] by a certificate [
or registration holder
] with
the
board's
[
Board's
] licensing rules, including the
mandatory continuing education requirements and payment of the annual license
fee, and any penalties and other costs attached thereto. In the case of board-imposed
disciplinary or administrative sanctions, the certificate or registration
holder must be in compliance with all the provisions of the board order to
be considered in
good
[
Good
] standing
;
[
.
]
--The
] holder of a license issued by the board to a certificate or registration
holder pursuant to the Act, or pursuant to provisions of a prior Act
;
[
.
]
--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
;
[
.
]
--An
]
individual, partnership, corporation, registered limited liability partnership,
or limited liability company
;
[
.
]
--An
] office of a firm required to be licensed with the board for the purpose
of practicing public accountancy
;
[
.
]
--
]means services
or work that requires the specialized knowledge or skills associated with
certified public accountants, including:
.
]
--When
] used with reference to financial statements, [
means
] either
an engagement performed through the application of procedures under the Statement
on Standards for Accounting and Review Services or any opinion, report, or
other form of language that states or implies assurance as to the reliability
of any financial statements and/or includes or is accompanied by any statement
or implication that the person or firm issuing it has special knowledge or
competence in accounting or auditing. Such a statement or implication of special
knowledge or competence may arise from use by the issuer of the report of
names or titles indicating that he or it is an accountant or auditor or from
the language of the report itself. The term "report" includes any form of
language which disclaims an opinion when such form of language is conventionally
understood to imply any assurance as to the reliability of the financial statements
to which reference is made. It also includes any form of language conventionally
used with respect to a compilation or review of financial statements, and
any other form of language that implies such special knowledge or competence
;
[
.
]
(4)
] Section 501.90 of this title
(relating to Discreditable Acts);
(5)
] Section 501.91 of this title
(relating to Reportable Events);
(6)
] Section 501.92 of this title
(relating to Frivolous Complaints);
(7)
] Section 501.93 of this title
(relating to Responses); and
(8)
] Section 501.94 of this title
(relating to Mandatory Continuing Education Reporting).
Subchapter D. RESPONSIBILITIES TO THE PUBLIC
Chapter 509.
RULEMAKING PROCEDURES
Chapter 518.
UNAUTHORIZED PRACTICE OF PUBLIC ACCOUNTANCY
Chapter 519.
PRACTICE AND PROCEDURE
Chapter 519.
PRACTICE AND PROCEDURE
Subchapter B. COMPLAINTS AND INVESTIGATIONS
Subchapter C. PROCEEDINGS AT SOAH
Subchapter D. PROCEDURES AFTER HEARING