TITLE 22.EXAMINING BOARDS

Part 1. TEXAS BOARD OF ARCHITECTURAL EXAMINERS

Chapter 1. ARCHITECTS

Subchapter A. SCOPE; DEFINITIONS

22 TAC §1.12

The Texas Board of Architectural Examiners adopts new section 1.12 for Title 22, Chapter 1, Subchapter A, pertaining to a statutory joint advisory committee to advise the Board and the Texas Board of Professional Engineers on issues related to the practice of engineering, the practice of architecture, and the practice of landscape architecture, as published in the December 19, 2003, issue of the Texas Register (28 TexReg 11197). The section is being adopted without changes, and the text will not be republished in the Texas Register .

The new rule will govern issues related to the appointment, tenure, and functions of the statutory joint advisory committee as follows: the Board’s chairman will appoint three members of the Board and one architect who is not a member of the Board to serve on the joint advisory committee. The three members of the Board will include two architects and one landscape architect. Members will serve staggered six-year terms. The terms of one or two of the members must expire each odd numbered year. The joint advisory committee will meet at least twice each year to address issues resulting from the overlap between activities that constitute the practices of engineering and architecture and the practices of engineering and landscape architecture. The joint advisory committee will issue advisory opinions to the Board and the Texas Board of Professional Engineers (TBPE) on subjects including whether certain activities constitute the practice of engineering, the practice of architecture, and/or the practice of landscape architecture; specific disciplinary proceedings initiated by the Board or by TBPE; and the need for persons working on particular projects to be registered by the Board or licensed by TBPE. The Board will notify the joint advisory committee of the final action taken by the Board with regard to a matter addressed in an advisory opinion issued to the Board. The Board will enter into a memorandum of understanding with TBPE regarding the joint advisory committee. The mission of the joint advisory committee will be to assist the Board and TBPE in protecting the public rather than advancing the interests of either agency or the profession(s) it regulates.

New section 1.12 provides for a group of qualified people to handle complex issues resulting from the overlap of the three professions. In addition, the two agencies will be provided with reliable guidance regarding enforcement issues related to the overlap of the three professions.

The agency received no comments pertaining to the proposal to adopt this new section.

The new section is adopted pursuant to Sections 1051.202 and 1051.212 of Tex. Occupations Code Annotated ch. 1051, which provide the Texas Board of Architectural Examiners with authority to promulgate rules, including rules related to the statutory joint advisory committee.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2004.

TRD-200401960

Cathy L. Hendricks, ASID/IIDA

Executive Director

Texas Board of Architectural Examiners

Effective date: April 4, 2004

Proposal publication date: December 19, 2003

For further information, please call: (512) 305-8535


Subchapter B. ELIGIBILITY FOR REGISTRATION

22 TAC §1.21, §1.22

The Texas Board of Architectural Examiners adopts amendments to Sections 1.21 and 1.22 for Title 22, Chapter 1, Subchapter B, pertaining to registration as published in the December 19, 2003, issue of the Texas Register (28 TexReg 11198). Section 1.21 is being adopted with changes. Section 1.22 is being adopted without changes, and the text will not be republished in the Texas Register .

The only change to Section 1.21 as proposed removes the word "certified" from the phrase "other certified documentation."

The amended Section 1.21 adds a requirement that an applicant for registration by examination must provide verification that the applicant is legally in the United States pursuant to the Federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

The amended Section 1.22 modifies the requirements related to obtaining reciprocal registration by adding language that requires a reciprocal applicant to hold a registration that is active and in good standing in another jurisdiction that has registration requirements substantially equivalent to Texas registration requirements or that has entered into a reciprocity agreement with the Board that has been approved by the Governor of Texas. The amendment reflects a recently enacted legislative change.

As a result of the amendments to the sections, the agency will be upholding its statutory responsibility to assist with enforcement of the Federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996 and, with regard to the amendment to the reciprocal registration rule, the opportunities for obtaining reciprocal registration will be clearly described in the rules.

The agency received no comments pertaining to the proposals to amend these sections.

The amendments are adopted pursuant to Section 1051.202 of the Tex. Occupations Code, which provides the Texas Board of Architectural Examiners with general authority to adopt rules necessary to the administration of its statutory duties. The amendment to the reciprocal registration rule is further authorized by Section 1051.305 of the Tex. Occupations Code, which allows the Board to grant reciprocal registration privileges only under certain specified circumstances.

§1.21.Registration by Examination.

(a) In order to obtain architectural registration by examination in Texas, an Applicant:

(1) shall have a professional degree from an architectural education program accredited by the National Architectural Accreditation Board (NAAB) or from an architectural education program outside the United States where an evaluation by NAAB or another organization acceptable to the Board has concluded that the program is substantially equivalent to an NAAB accredited professional program;

(2) shall successfully demonstrate completion of the Texas Board of Architectural Examiners Intern Development Training Requirement; and

(3) shall successfully complete the architectural registration examination as more fully described in Subchapter C.

(b) An Applicant for architectural registration by examination shall not be required to complete the Texas Board of Architectural Examiners Intern Development Training Requirement if the Applicant successfully demonstrates that prior to January 1, 1984, he/she acquired at least eight (8) years of acceptable architectural experience or eight (8) years of a combination of acceptable education and experience.

(c) An Applicant for architectural registration by examination who commenced his/her architectural education or experience prior to September 1, 1999, shall be subject to the rules and regulations relating to educational and experiential requirements as they existed on August 31, 1999.

(d) For purposes of this section, an Applicant shall be considered to have "commenced" his/her architectural education upon enrollment in an acceptable architectural education program.

(e) In accordance with federal law, the Board must verify proof of legal status in the United States. Each Applicant shall provide evidence of legal status by submitting a certified copy of a United States birth certificate or other documentation that satisfies the requirements of the Federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996. A list of acceptable documents may be obtained by contacting the Board’s office.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2004.

TRD-200401961

Cathy L. Hendricks, ASID/IIDA

Executive Director

Texas Board of Architectural Examiners

Effective date: April 4, 2004

Proposal publication date: December 19, 2003

For further information, please call: (512) 305-8535


Subchapter C. EXAMINATION

22 TAC §1.41

The Texas Board of Architectural Examiners adopts an amendment to section 1.41 for Title 22, Chapter 1, Subchapter C, pertaining to the refund of examination fees as published in the December 19, 2003, issue of the Texas Register (28 TexReg 11199). The section is being adopted with changes. The section describes requirements related to the general procedures for requesting refunds of fees for the examination for architectural registration in Texas.

The amendment to section 1.41 adds a new section regarding refunds of examination fees. It states that the application fee is not refundable but that a portion of the examination fee paid to the national examination provider may be refunded if a candidate is precluded from taking or scheduling the examination because of extreme hardship. The new section requires the submission of a written request for refund within thirty days of the examination date. The new section states that an examination fee may not be transferred to a subsequent examination.

Changes to the amendments to section 1.41, as proposed, include changing the phrase "date of the scheduled examination" to "date the examination was scheduled or intended to be scheduled" and adding "[a]pproval of the request [for a refund] and refund of the fee or portion of the fee by the national examination provider" as an additional condition precedent for granting refunds of examination fees.

As a result of the amendment, the policy regarding refunds of examination fees will be readily available to persons who might be affected by the policy.

The Board received no comments pertaining to the proposal to amend section 1.41.

The amendment to this section is adopted pursuant to Section 1051.303 of Tex. Occupations Code Annotated ch. 1051, which directs the Texas Board of Architectural Examiners to adopt a comprehensive refund policy for examination fees.

§1.41.Requirements.

(a) Every Applicant for architectural registration by examination in Texas must successfully complete all sections of the Architect Registration Examination (ARE).

(b) The Board may approve an Applicant to take the ARE only after the Applicant has completed the educational requirements for architectural registration by examination in Texas, has completed at least six (6) months of full-time experience working under the direct supervision of a licensed architect, and has submitted the required application materials.

(c) An Applicant may take the ARE at any official ARE testing center but must satisfy all Texas registration requirements in order to obtain architectural registration by examination in Texas.

(d) Each Candidate must achieve a passing score in each division of the ARE. Scores from individual divisions may not be averaged to achieve a passing score.

(e) An examination fee may be refunded as follows:

(1) The application fee paid to the Board is not refundable or transferable.

(2) The Board, on behalf of a Candidate, may request a refund of a portion of the examination fee paid to the national examination provider for scheduling all or a portion of the registration examination. A charge for refund processing may be withheld by the national examination provider. Refunds of examination fees are subject to the following conditions:

(A) A Candidate, because of extreme hardship, must have been precluded from scheduling or taking the examination or a portion of the examination. For purposes of this subsection, extreme hardship is defined as a serious illness or accident of the Candidate or a member of the Candidate’s immediate family or the death of an immediate family member. Immediate family members include the spouse, child(ren), parent(s), and sibling(s) of the Candidate. Any other extreme hardship may be considered on a case-by-case basis.

(B) A written request for a refund based on extreme hardship must be submitted not later than thirty (30) days after the date the examination or portion of the examination was scheduled or intended to be scheduled. Documentation of the extreme hardship that precluded the applicant from scheduling or taking the examination must be submitted by the Candidate as follows:

(i) Illness: verification from a physician who treated the illness.

(ii) Accident: a copy of an official accident report.

(iii) Death: a copy of a death certificate or newspaper obituary.

(C) Approval of the request and refund of the fee or portion of the fee by the national examination provider.

(3) An examination fee may not be transferred to a subsequent examination.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2004.

TRD-200401962

Cathy L. Hendricks, ASID/IIDA

Executive Director

Texas Board of Architectural Examiners

Effective date: April 4, 2004

Proposal publication date: December 19, 2003

For further information, please call: (512) 305-8535


22 TAC §1.45

The Texas Board of Architectural Examiners adopts new section 1.45 for Title 22, Chapter 1, Subchapter C, pertaining to special accommodations for taking the Architect Registration Examination as published in the December 19, 2003, issue of the Texas Register (28 TexReg 11199). The section is being adopted without changes, and the text will not be republished in the Texas Register .

New §1.45 describes the Board’s policy for ensuring that the examination process complies with the requirements of the Americans with Disabilities Act. It states that every registration examination must be conducted in an accessible place and manner or alternative accessible arrangements must be afforded so that no qualified individual with a disability is unreasonably denied the opportunity to complete the licensure process because of his/her disability; that special accommodations can be provided for examinees with physical or mental impairments that substantially limit major life activities; that available accommodations include the modification of examination procedures and the provision of auxiliary aids and services designed to furnish an individual with a disability an equal opportunity to demonstrate his/her knowledge, skills, and ability; that the Board is not required to approve every request for accommodation or auxiliary aid or provide every accommodation or service as requested; that the Board is not required to grant a request for accommodation if doing so would fundamentally alter the measurement of knowledge or the measurement of a skill intended to be tested by the examination or would create an undue financial or administrative burden; that the procedure for requesting accommodation will be (1) for an applicant requesting an accommodation to submit documentation regarding the existence of a disability and the reason the requested accommodation is necessary to provide the applicant with an equal opportunity to exhibit his/her knowledge, skills, and ability through the examination, (2) for an applicant requesting an accommodation to have a licensed health care professional or other qualified evaluator provide certification regarding the disability, and (3) for an applicant seeking an accommodation to make a request for accommodation on the prescribed form and provide documentation of the need for accommodation well in advance of the examination date; that to support a request for an accommodation or an auxiliary aid, the following information is required: (1) identification of the type of disability (physical, mental, learning), (2) information to substantiate the credentials of the evaluator, and (3) professional verification of the disability and the required accommodation; that documentation supporting an accommodation shall be valid for five (5) years from the date submitted to the Board except that no further documentation shall be required where the original documentation clearly states that the disability will not change in the future; that the Board has the responsibility to evaluate each request for accommodation and to approve, deny, or suggest alternative reasonable accommodations; that the Board may consider an Applicant's history of accommodation in determining its reasonableness in relation to the currently identified impact of the disability; and that information related to a request for accommodation shall be kept confidential to the extent provided by law.

The board received no comments pertaining to the proposal to adopt this section.

The new section is adopted pursuant to Section 1051.301 of Tex. Occupations Code Annotated ch. 1051, which directs the Texas Board of Architectural Examiners to adopt rules to ensure that examinations are administered in compliance with the Americans with Disabilities Act of 1990.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2004.

TRD-200401963

Cathy L. Hendricks, ASID/IIDA

Executive Director

Texas Board of Architectural Examiners

Effective date: April 4, 2004

Proposal publication date: December 19, 2003

For further information, please call: (512) 305-8535


Subchapter D. CERTIFICATION AND ANNUAL RENEWAL

22 TAC §1.65, §1.66

The Texas Board of Architectural Examiners adopts amendments to sections 1.65 and 1.66 for Title 22, Chapter 1, Subchapter D, pertaining to renewal and reinstatement as published in the December 19, 2003, issue of the Texas Register (28 TexReg 11201).

The sections are being adopted with changes.

The sections describe the annual registration renewal procedure and the procedure for reinstating a registration that has been revoked, surrendered, or cancelled.

The changes to §1.65 involve removing text that differentiates "registration by examination" from "registration by reexamination" and deleting references to the requirement that the applicant complete the "current" registration examination.

The amendment to §1.65 will implement recently enacted statutory language regarding the automatic cancellation of any registration that is delinquent for one year. It states that a registration shall be cancelled by operation of law on the one-year anniversary of its expiration unless it is renewed before that time and that after such automatic cancellation, a registration may not be reinstated. If a registration is automatically cancelled pursuant to the section, the registrant will have to (1) submit an application for registration and satisfy all requirements for registration, including the successful completion of the registration examination; (2) submit an application for registration by reciprocal transfer and satisfy all requirements for registration by reciprocal transfer, including the successful completion of the registration examination; or (3) submit an application for registration and demonstrate that he or she moved to another state and is currently registered and has been in practice in the other state for at least the two years immediately preceding the date of the application.

The change to §1.66 involves adding the phrase "by operation of law" in subsection (f) of the section. The purpose of the change is to clarify that the subsection applies only to cancellations that are effectuated by operation of law rather than to all cancellations.

The amendment to §1.66 will implement recently enacted statutory language regarding the reinstatement of a registration that has been revoked as a result of disciplinary action, surrendered in lieu of disciplinary action, or cancelled by operation of law due to the registrant’s failure to renew the registration. It requires that a revoked or surrendered registration may not be reinstated unless the applicant demonstrates that he or she has taken reasonable steps to correct the misconduct or deficiency that led to the revocation or surrender, demonstrates that approval of the application is not inconsistent with the Board’s duty to protect the public, and pays all fees and costs incurred by the Board as a result of any proceeding that led to the revocation or surrender. It also states that a registration cancelled due to the registrant’s failure to renew it may not be reinstated.

The Board received no comments pertaining to the proposal to amend these sections.

The amendments are adopted pursuant to Section 1051.353 of the Tex. Occupations Code, which directs the Texas Board of Architectural Examiners to cancel a registration that has been delinquent for one year and prohibits the reinstatement of a registration that was cancelled due to delinquency, and pursuant to Section 1051.403 of the Tex. Occupations Code, which allows the Board to reinstate a revoked registration only after the reinstatement applicant pays all fees and costs associated with the revocation and also presents evidence to support the reinstatement.

§1.65.Annual Renewal Procedure.

(a) The Board shall send an annual registration renewal notice to each Architect at the Architect's current address of record. An Architect must notify the Board in writing each time the Architect's address of record changes, and the written notice of the Architect's change of address must be signed by the Architect and submitted to the Board within sixty (60) days of the effective date of the change of address.

(b) An Architect may renew his/her registration prior to its specified annual expiration date by:

(1) remitting the correct fee to the Board; and

(2) providing the information or documentation requested by the annual registration renewal notice and signing the renewal form to verify the accuracy of all information and documentation provided.

(c) Each Architect must pay a mandatory $200 professional fee in addition to the annual registration renewal fee prescribed by the Board.

(d) If an Architect fails to remit a completed registration renewal form and the prescribed fee on or before the specified expiration date of the Architect's registration, the Board shall impose a late payment penalty that must be paid before the Architect's registration may be renewed.

(e) If the Board receives official notice that an Architect has defaulted on the repayment of a loan guaranteed by the Texas Guaranteed Student Loan Corporation (TGSLC), the Board may not renew the Architect's registration unless:

(1) the renewal is the first renewal following the Board's receipt of official notice regarding the default;

(2) the Architect presents to the Board a certificate from TGSLC certifying that the Architect has entered into a repayment agreement for the defaulted loan; or

(3) the Architect presents to the Board a certificate from TGSLC certifying that the Architect is not in default on a loan guaranteed by TGSLC.

(f) If the Board receives official notice that an Architect has failed to pay court ordered child support, the Board may be prohibited from renewing the Architect's registration.

(g) If a registration is not renewed within one (1) year after the specified registration expiration date, the registration shall be cancelled by operation of law on the one-year anniversary of its expiration without an opportunity for a formal hearing. If a registration is cancelled pursuant to this subsection, the registration may not be reinstated. In order to obtain a new certificate of registration, a person whose registration was cancelled pursuant to this subsection must:

(1) submit an application for registration and satisfy all requirements for registration pursuant to Section 1.21, including the successful completion of the registration examination;

(2) submit an application for registration by reciprocal transfer and satisfy all requirements for registration by reciprocal transfer pursuant to Section 1.22, including the successful completion of the registration examination; or

(3) submit an application for registration and demonstrate that he/she moved to another state and is currently licensed or registered and has been in practice in the other state for at least the two (2) years immediately preceding the date of the application.

§1.66.Reinstatement.

(a) Once the revocation, cancellation, or surrender of an Architect's registration is effective, the registration may be reinstated only after an application for reinstatement is properly submitted and approved and the prescribed reinstatement fee is paid.

(b) If a reinstatement Applicant has practiced architecture or used any form of the title "architect" in violation of the Architects' Registration Law since the effective date of the revocation, cancellation, or surrender of the Applicant's registration, the reinstatement fee to be paid upon approval of the application shall include an amount equal to the sum of the registration renewal fees for each year since the effective date of the revocation, cancellation, or surrender.

(c) An application for reinstatement may be denied on the following grounds:

(1) the registration has been revoked for a continuous period of five (5) years or longer;

(2) the reinstatement Applicant has performed an act, omitted an act or allowed an omission, or otherwise engaged in a practice that could serve as the basis for the rejection of an application for registration or for the revocation of a registration; or

(3) the registration was voluntarily surrendered in lieu of potential disciplinary action and the Board finds that the approval of the reinstatement application does not appear to be in the public's interest.

(d) If at least five (5) years have passed since the effective date of the revocation, cancellation, or surrender of a registration, one of the following shall be required prior to approval of an application for reinstatement:

(1) successful completion of all sections of the current registration examination during the five (5) years immediately preceding reinstatement; or

(2) verification that the Applicant currently holds an architectural registration that is active and in good standing in another jurisdiction where the registration requirements are substantially equivalent to Texas architectural registration requirements.

(e) If a registration was revoked as a result of disciplinary action or surrendered in lieu of disciplinary action, the registration shall not be reinstated unless the Applicant:

(1) demonstrates that the Applicant has taken reasonable steps to correct the misconduct or deficiency that led to the revocation or surrender;

(2) demonstrates that approval of the application is not inconsistent with the Board’s duty to protect the public by ensuring that registrants are duly qualified and fit for registration; and

(3) pays all fees and costs incurred by the Board as a result of any proceeding that led to the revocation or surrender.

(f) If a registration is cancelled by operation of law due to the Registrant’s failure to renew the registration within one (1) year after its designated expiration date, the registration may not be reinstated.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2004.

TRD-200401964

Cathy L. Hendricks, ASID/IIDA

Executive Director

Texas Board of Architectural Examiners

Effective date: April 4, 2004

Proposal publication date: December 19, 2003

For further information, please call: (512) 305-8535


Subchapter E. FEES

22 TAC §1.81, §1.82

The Texas Board of Architectural Examiners adopts amendments to Sections 1.81 and 1.82 for Title 22, Chapter 1, Subchapter E, pertaining to fees, as published in the December 19, 2003, issue of the Texas Register (28 TexReg 11201).

Section 1.81 is being adopted without changes, and the text will not be republished in the Texas Register . Section 1.82 is being adopted with changes.

The sections describe the method of establishing fees, the amounts of fees, the requirements related to paying fees, and the consequences of failing to pay the annual registration renewal fee.

The amendment to Section 1.81 adds the agency’s fee schedule to the section, clarifies that cash will not be accepted as payment for any fee, adds a reference to a processing fee to be charged if a check is returned unpaid by the bank upon which the check is drawn, and describes a fee exemption for members of the U.S. military who are on active duty status.

One change to the proposed amendment to §1.82 involves replacing the sentence "[a] registration certificate shall become invalid on its designated expiration date unless it is renewed" with "[a] person whose certificate of registration has expired may not engage in activities that require registration until the certificate of registration has been renewed" in Subsection (b). The other change replaces "registrant" with "Registrant" to denote a defined term.

The amendment to Section 1.82 describes the automatic cancellation provision enacted by the Legislature that will result in the automatic cancellation of any registration that remains delinquent for one year after its designated expiration date.

The Board received one comment pertaining to the proposal to amend these sections. The comment suggested that the Board should consider exempting members of the military from having to submit annual renewal forms when they are on active duty in a combat situation. The Board declined to take action to implement the suggestion because of the importance of maintaining current information related to all registrants.

The amendments are adopted pursuant to Section 1051.651 of the Tex. Occupations Code, which provides the Texas Board of Architectural Examiners with authority to establish fees as reasonable and necessary to cover the costs of administering its statutory duties, and pursuant to Sections 1051.353 and 1051.354 of the Tex. Occupations Code, which provide authority for the subsections regarding the automatic cancellation of registrations and the fee exemptions for members of the U.S. military.

§1.82.Annual Fees.

(a) The Board shall send an annual notice to each person who must pay a fee that is due annually. Each annual notice shall be sent to the intended recipient's current address of record. Every annual fee must be paid regardless of whether an annual notice is received.

(b) Every Registrant must pay his/her annual renewal fee on or before the designated expiration date of the Registrant’s certificate of registration. If a Registrant fails to pay his/her annual renewal fee on or before the designated expiration date of the Registrant’s certificate of registration, the Board shall require that the Registrant pay a penalty fee in addition to the registration renewal fee before the registration may be renewed. A person whose certificate of registration has expired may not engage in activities that require registration until the certificate of registration has been renewed.

(c) If a Registrant fails to renew his/her certificate of registration within one year after its designated expiration date, the certificate of registration shall be cancelled by operation of law without the opportunity for a formal hearing. The Board shall send a notice of pending cancellation to a Registrant who fails to renew his/her certificate of registration within one year after its designated expiration date. The notice shall be sent to the Registrant’s current address of record.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2004.

TRD-200401965

Cathy L. Hendricks, ASID/IIDA

Executive Director

Texas Board of Architectural Examiners

Effective date: April 4, 2004

Proposal publication date: December 19, 2003

For further information, please call: (512) 305-8535


Chapter 3. LANDSCAPE ARCHITECTS

Subchapter A. SCOPE; DEFINITIONS

22 TAC §3.12

The Texas Board of Architectural Examiners adopts new section 3.12 for Title 22, Chapter 3, Subchapter A, pertaining to a statutory joint advisory committee to advise the Board and the Texas Board of Professional Engineers on issues related to the practice of engineering, the practice of architecture, and the practice of landscape architecture, as published in the December 19, 2003, issue of the Texas Register (28 TexReg 11203).

The section is being adopted without changes, and the text will not be republished in the Texas Register .

The new rule will govern issues related to the appointment, tenure, and functions of the statutory joint advisory committee as follows: the Board’s chairman will appoint three members of the Board and one architect who is not a member of the Board to serve on the joint advisory committee. The three members of the Board will include two architects and one landscape architect. Members will serve staggered six-year terms. The terms of one or two of the members must expire each odd numbered year. The joint advisory committee will meet at least twice each year to address issues resulting from the overlap between activities that constitute the practices of engineering and architecture and the practices of engineering and landscape architecture. The joint advisory committee will issue advisory opinions to the Board and the Texas Board of Professional Engineers (TBPE) on subjects including whether certain activities constitute the practice of engineering, the practice of architecture, and/or the practice of landscape architecture; specific disciplinary proceedings initiated by the Board or by TBPE; and the need for persons working on particular projects to be registered by the Board or licensed by TBPE. The Board will notify the joint advisory committee of the final action taken by the Board with regard to a matter addressed in an advisory opinion issued to the Board. The Board will enter into a memorandum of understanding with TBPE regarding the joint advisory committee. The mission of the joint advisory committee will be to assist the Board and TBPE in protecting the public rather than advancing the interests of either agency or the profession(s) it regulates.

New section 3.12 provides for a group of qualified people to handle complex issues resulting from the overlap of the three professions. In addition, the two agencies will be provided with reliable guidance regarding enforcement issues related to the overlap of the three professions

The board received no comments pertaining to the proposal to adopt this new rule.

The new section is adopted pursuant to Sections 1051.202 and 1051.212 of Tex. Occupations Code Annotated ch. 1051, which provide the Texas Board of Architectural Examiners with authority to promulgate rules, including rules related to the statutory joint advisory committee.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2004.

TRD-200401976

Cathy L. Hendricks, ASID/IIDA

Executive Director

Texas Board of Architectural Examiners

Effective date: April 4, 2004

Proposal publication date: December 19, 2003

For further information, please call: (512) 305-8535


Subchapter B. ELIGIBILITY FOR REGISTRATION

22 TAC §3.21, §3.22

The Texas Board of Architectural Examiners adopts amendments to Sections 3.21 and 3.22 for Title 22, Chapter 3, Subchapter B, pertaining to registration, as published in the December 19, 2003, issue of the Texas Register (28 TexReg 11205).

Section 3.21 is being adopted with changes. Section 3.22 is being adopted without changes, and the text will not be republished in the Texas Register .

The sections describe the general requirements for obtaining landscape architectural registration by examination and by reciprocal transfer.

The only change to §3.21 as proposed removes the word "certified" from the phrase "other certified documentation."

The amendment to Section 3.21 adds a requirement that an applicant for registration by examination must provide verification that the applicant is legally in the United States pursuant to the Federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

The amendment to Section 3.22 modifies the requirements related to obtaining reciprocal registration by adding language that requires a reciprocal applicant to hold a registration that is active and in good standing in another jurisdiction that has registration requirements substantially equivalent to Texas registration requirements or that has entered into a reciprocity agreement with the Board that has been approved by the Governor of Texas. The amendment reflects a recently enacted legislative change. The amendments to the sections will enable the agency to uphold its statutory responsibility to assist with enforcement of the Federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996 and, with regard to the proposed amendment to the reciprocal registration rule, that the opportunities for obtaining reciprocal registration will be clearly described in the rules.

The board received no comments pertaining to the proposal to adopt this new section.

The amendments are adopted pursuant to Section 1051.202 of the Tex. Occupations Code, which provides the Texas Board of Architectural Examiners with general authority to adopt rules necessary to the administration of its statutory duties. The proposed amendment to the reciprocal registration rule is further authorized by Section 1051.305 of the Tex. Occupations Code, which allows the Board to grant reciprocal registration privileges only under certain specified circumstances.

§3.21.Registration by Examination.

(a) In order to obtain landscape architectural registration by examination in Texas, an Applicant:

(1) shall have a professional degree from a landscape architectural education program accredited by the Landscape Architectural Accreditation Board (LAAB) or from a landscape architectural education program outside the United States where an evaluation by Education Credential Evaluators or another organization acceptable to the Board has concluded that the program is substantially equivalent to an LAAB accredited professional program;

(2) shall successfully demonstrate that he/she has gained at least two (2) years' actual experience working directly under a licensed landscape architect or other experience approved by the Board pursuant to the Texas Table of Equivalents for Experience in Landscape Architecture; and

(3) shall successfully complete the landscape architectural registration examination as more fully described in Subchapter C.

(b) An Applicant for landscape architectural registration by examination who commenced his/her landscape architectural education or experience prior to September 1, 1999, shall be subject to the rules and regulations relating to educational and experiential requirements as they existed on August 31, 1999.

(c) For purposes of this section, an Applicant shall be considered to have "commenced" his/her landscape architectural education upon enrollment in an acceptable landscape architectural education program.

(d) In accordance with federal law, the Board must verify proof of legal status in the United States. Each Applicant shall provide evidence of legal status by submitting a certified copy of a United States birth certificate or other documentation that satisfies the requirements of the Federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996. A list of acceptable documents may be obtained by contacting the Board’s office.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2004.

TRD-200401966

Cathy L. Hendricks, ASID/IIDA

Executive Director

Texas Board of Architectural Examiners

Effective date: April 4, 2004

Proposal publication date: December 19, 2003

For further information, please call: (512) 305-8535


Subchapter C. EXAMINATION

22 TAC §3.41

The Texas Board of Architectural Examiners adopts an amendment to section 3.41 for Title 22, Chapter 3, Subchapter C, pertaining to the refund of examination fees, as published in the December 19, 2003, issue of the Texas Register (28 TexReg 11205).

The section is being adopted with changes.

The section describes requirements related to the general procedures for the examination for landscape architectural registration in Texas.

The amendment to section 3.41 adds a new section regarding refunds of examination fees.

Changes to the amendment, as proposed, disallow refunds of exam fees but state that a portion of an examination fee may be reapplied to a subsequent examination if a candidate was unable to take a scheduled examination due to "extreme hardship," which is specifically defined. The changes also describe the process for requesting the reapplication of a portion of an examination fee and state that the national examination provider must approve the request in order for it to be granted.

As a result of the amendment, the policy regarding refunds of examination fees will be readily available to persons who might be affected by the policy.

The board received no comments pertaining to the proposal to adopt this amendment.

The amendment to this section is adopted pursuant to Section 1051.303 of Tex. Occupations Code Annotated ch. 1051, which directs the Texas Board of Architectural Examiners to adopt a comprehensive refund policy for examination fees.

§3.41.Requirements.

(a) Every Applicant for landscape architectural registration by examination in Texas must successfully complete all sections of the Landscape Architect Registration Examination (LARE).

(b) The Board may approve an Applicant to take the LARE only after the Applicant has completed the educational requirements for landscape architectural registration by examination in Texas, has completed at least six (6) months of full-time experience working under the direct supervision of a licensed landscape architect, and has submitted the required application materials.

(c) An Applicant may take the LARE at any official LARE testing center but must satisfy all Texas registration requirements in order to obtain landscape architectural registration by examination in Texas.

(d) Each Candidate must achieve a passing score in each division of the LARE. Scores from individual divisions may not be averaged to achieve a passing score.

(e) An examination fee may not be refunded. A portion of an examination fee may be reapplied to a subsequent examination as follows:

(1) A Candidate, because of extreme hardship, must have been precluded from scheduling or taking the examination or a portion of the examination. For purposes of this subsection, extreme hardship is defined as a serious illness or accident of the Candidate or a member of the Candidate’s immediate family or the death of an immediate family member. Immediate family members include the spouse, child(ren), parent(s), and sibling(s) of the Candidate. Any other extreme hardship may be considered on a case-by-case basis.

(2) A written request to reapply the examination fee based on extreme hardship must be submitted not later than thirty (30) days after the date of the scheduled examination or portion of the examination. Documentation of the extreme hardship that precluded the applicant from scheduling or taking the examination must be submitted by the Candidate as follows:

(A) Illness: verification from a physician who treated the illness.

(B) Accident: a copy of an official accident report.

(C) Death: a copy of a death certificate or newspaper obituary.

(3) The national examination provider must approve the request.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2004.

TRD-200401967

Cathy L. Hendricks, ASID/IIDA

Executive Director

Texas Board of Architectural Examiners

Effective date: April 4, 2004

Proposal publication date: December 19, 2003

For further information, please call: (512) 305-8535


22 TAC §3.45

The Texas Board of Architectural Examiners adopts new §3.45 for Title 22, Chapter 3, Subchapter C, pertaining to special accommodations for taking the registration examination for landscape architectural registration in Texas, as published in the December 19, 2003, issue of the Texas Register (28 TexReg 11206).

The section is being adopted without changes, and the text will not be republished in the Texas Register .

New §3.45 describes the Board’s policy for ensuring that the examination process complies with the requirements of the Americans with Disabilities Act. It states that every registration examination must be conducted in an accessible place and manner or alternative accessible arrangements must be afforded so that no qualified individual with a disability is unreasonably denied the opportunity to complete the licensure process because of his/her disability; that special accommodations can be provided for examinees with physical or mental impairments that substantially limit major life activities; that available accommodations include the modification of examination procedures and the provision of auxiliary aids and services designed to furnish an individual with a disability an equal opportunity to demonstrate his/her knowledge, skills, and ability; that the Board is not required to approve every request for accommodation or auxiliary aid or provide every accommodation or service as requested; that the Board is not required to grant a request for accommodation if doing so would fundamentally alter the measurement of knowledge or the measurement of a skill intended to be tested by the examination or would create an undue financial or administrative burden; that the procedure for requesting accommodation will be (1) for an applicant requesting an accommodation to submit documentation regarding the existence of a disability and the reason the requested accommodation is necessary to provide the applicant with an equal opportunity to exhibit his/her knowledge, skills, and ability through the examination, (2) for an applicant requesting an accommodation to have a licensed health care professional or other qualified evaluator provide certification regarding the disability, and (3) for an applicant seeking an accommodation to make a request for accommodation on the prescribed form and provide documentation of the need for accommodation well in advance of the examination date; that to support a request for an accommodation or an auxiliary aid, the following information is required: (1) identification of the type of disability (physical, mental, learning), (2) information to substantiate the credentials of the evaluator, and (3) professional verification of the disability and the required accommodation; that documentation supporting an accommodation shall be valid for five (5) years from the date submitted to the Board except that no further documentation shall be required where the original documentation clearly states that the disability will not change in the future; that the Board has the responsibility to evaluate each request for accommodation and to approve, deny, or suggest alternative reasonable accommodations; that the Board may consider an Applicant's history of accommodation in determining its reasonableness in relation to the currently identified impact of the disability; and that information related to a request for accommodation shall be kept confidential to the extent provided by law.

The Board received no comments pertaining to the proposal to adopt this section.

The new section is adopted pursuant to Section 1051.301 of Tex. Occupations Code Annotated ch. 1051, which directs the Texas Board of Architectural Examiners to adopt rules to ensure that examinations are administered in compliance with the Americans with Disabilities Act of 1990.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2004.

TRD-200401968

Cathy L. Hendricks, ASID/IIDA

Executive Director

Texas Board of Architectural Examiners

Effective date: April 4, 2004

Proposal publication date: December 19, 2003

For further information, please call: (512) 305-8535


Subchapter D. CERTIFICATION AND ANNUAL RENEWAL

22 TAC §3.65, §3.66

The Texas Board of Architectural Examiners adopts amendments to sections 3.65 and 3.66 for Title 22, Chapter 3, Subchapter D, pertaining to renewal and reinstatement, as published in the December 19, 2003, issue of the Texas Register (28 TexReg 11208).

The section is being adopted with changes.

The sections describe the annual registration renewal procedure and the procedure for reinstating a registration that has been revoked, surrendered, or cancelled.

Changes to §3.65 involve removing text that differentiates "registration by examination" from "registration by reexamination" and deleting references to the requirement that the applicant complete the "current" registration examination.

The amendment to §3.65 will implement recently enacted statutory language regarding the automatic cancellation of any registration that is delinquent for one year. It states that a registration shall be cancelled by operation of law on the one-year anniversary of its expiration unless it is renewed before that time and that after such automatic cancellation, a registration may not be reinstated. If a registration is automatically cancelled pursuant to the section, the registrant will have to (1) submit an application for registration and satisfy all requirements for registration, including the successful completion of the registration examination; (2) submit an application for registration by reciprocal transfer and satisfy all requirements for registration by reciprocal transfer, including the successful completion of the registration examination; or (3) submit an application for registration and demonstrate that he or she moved to another state and is currently registered and has been in practice in the other state for at least the two years immediately preceding the date of the application. The proposed amendments also will implement recently enacted statutory language requiring landscape architects to pay a $200 professional fee in addition to the annual registration renewal fee prescribed by the Board.

The change to §3.66 involves adding the phrase "by operation of law" in subsection (f) of the section. The purpose of the change is to clarify that the subsection applies only to cancellations that are effectuated by operation of law rather than to all cancellations.

The amendment to §3.66 will implement recently enacted statutory language regarding the reinstatement of a registration that has been revoked as a result of disciplinary action, surrendered in lieu of disciplinary action, or cancelled by operation of law due to the registrant’s failure to renew the registration. It requires that a revoked or surrendered registration may not be reinstated unless the applicant demonstrates that he or she has taken reasonable steps to correct the misconduct or deficiency that led to the revocation or surrender, demonstrates that approval of the application is not inconsistent with the Board’s duty to protect the public, and pays all fees and costs incurred by the Board as a result of any proceeding that led to the revocation or surrender. It also states that a registration cancelled due to the registrant’s failure to renew it may not be reinstated.

The board received no comments pertaining to the proposal to amend this section.

The amendments are adopted pursuant to Section 1051.353 of the Tex. Occupations Code, which directs the Texas Board of Architectural Examiners to cancel a registration that has been delinquent for one year and prohibits the reinstatement of a registration that was cancelled due to delinquency; pursuant to Section 1051.403 of the Tex. Occupations Code, which allows the Board to reinstate a revoked registration only after the reinstatement applicant pays all fees and costs associated with the revocation and also presents evidence to support the reinstatement; and pursuant to Section 1052.0541 of the Tex. Occupations Code, which prescribes a mandatory $200 professional fee for landscape architects.

§3.65.Annual Renewal Procedure.

(a) The Board shall send an annual registration renewal notice to each Landscape Architect at the Landscape Architect's current address of record. A Landscape Architect must notify the Board in writing each time the Landscape Architect's address of record changes, and the written notice of the Landscape Architect's change of address must be signed by the Landscape Architect and submitted to the Board within sixty (60) days of the effective date of the change of address.

(b) A Landscape Architect may renew his/her registration prior to its specified annual expiration date by:

(1) remitting the correct fee to the Board; and

(2) providing the information and documentation requested by the annual registration renewal notice and signing the renewal form to verify the accuracy of all information and documentation provided.

(c) If a Landscape Architect fails to remit a completed registration renewal form and the prescribed fee on or before the specified expiration date of the Landscape Architect's registration, the Board shall impose a late payment penalty that must be paid before the Landscape Architect's registration may be renewed.

(d) If the Board receives official notice that a Landscape Architect has defaulted on the repayment of a loan guaranteed by the Texas Guaranteed Student Loan Corporation (TGSLC), the Board may not renew the Landscape Architect's registration unless:

(1) the renewal is the first renewal following the Board's receipt of official notice regarding the default;

(2) the Landscape Architect presents to the Board a certificate from TGSLC certifying that the Landscape Architect has entered into a repayment agreement for the defaulted loan; or

(3) the Landscape Architect presents to the Board a certificate from TGSLC certifying that the Landscape Architect is not in default on a loan guaranteed by TGSLC.

(e) If the Board receives official notice that a Landscape Architect has failed to pay court ordered child support, the Board may be prohibited from renewing the Landscape Architect's registration.

(f) If a registration is not renewed within one (1) year after the specified registration expiration date, the registration shall be cancelled by operation of law on the one-year anniversary of its expiration without an opportunity for a formal hearing. If a registration is cancelled pursuant to this subsection, the registration may not be reinstated. In order to obtain a new certificate of registration, a person whose registration was cancelled pursuant to this subsection must:

(1) submit an application for registration and satisfy all requirements for registration pursuant to Section 3.21, including the successful completion of the registration examination;

(2) submit an application for registration by reciprocal transfer and satisfy all requirements for registration by reciprocal transfer pursuant to Section 3.22, including the successful completion of the registration examination; or

(3) submit an application for registration and demonstrate that he/she moved to another state and is currently licensed or registered and has been in practice in the other state for at least the two (2) years immediately preceding the date of the application.

(g) Each Landscape Architect must pay a mandatory $200 professional fee in addition to the annual registration renewal fee prescribed by the Board.

§3.66.Reinstatement.

(a) Once the revocation, cancellation, or Surrender of a Landscape Architect's registration is effective, the registration may be reinstated only after an application for reinstatement is properly submitted and approved and the prescribed reinstatement fee is paid.

(b) If a reinstatement Applicant has practiced landscape architecture or has used the term "landscape architect," the term "landscape architectural," the term "landscape architecture," or any similar term to describe himself/herself or to describe services he/she has offered or provided in Texas since the effective date of the revocation, cancellation, or Surrender of the Applicant's registration, the reinstatement fee to be paid upon approval of the application shall include an amount equal to the sum of the registration renewal fees for each year since the effective date of the revocation, cancellation, or Surrender.

(c) An application for reinstatement may be denied on the following grounds:

(1) the registration has been revoked for a continuous period of five (5) years or longer;

(2) the reinstatement Applicant has performed an act, omitted an act or allowed an omission, or otherwise engaged in a practice that could serve as the basis for the rejection of an application for registration or for the revocation of a registration; or

(3) the registration was voluntarily surrendered in lieu of potential disciplinary action and the Board finds that the approval of the reinstatement application does not appear to be in the public's interest.

(d) If at least five (5) years have passed since the effective date of the revocation, cancellation, or Surrender of a registration, one of the following shall be required prior to approval of an application for reinstatement:

(1) successful completion of all sections of the current registration examination during the five (5) years immediately preceding reinstatement; or

(2) verification that the Applicant currently holds a landscape architectural registration that is active and in good standing in another jurisdiction where the registration requirements are substantially equivalent to Texas landscape architectural registration requirements.

(e) If a registration was revoked as a result of disciplinary action or surrendered in lieu of disciplinary action, the registration shall not be reinstated unless the Applicant:

(1) demonstrates that the Applicant has taken reasonable steps to correct the misconduct or deficiency that led to the revocation or surrender;

(2) demonstrates that approval of the application is not inconsistent with the Board’s duty to protect the public by ensuring that registrants are duly qualified and fit for registration; and

(3) pays all fees and costs incurred by the Board as a result of any proceeding that led to the revocation or surrender.

(f) If a registration is cancelled by operation of law due to the Registrant’s failure to renew the registration within one (1) year after its designated expiration date, the registration may not be reinstated.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2004.

TRD-200401969

Cathy L. Hendricks, ASID/IIDA

Executive Director

Texas Board of Architectural Examiners

Effective date: April 4, 2004

Proposal publication date: December 19, 2003

For further information, please call: (512) 305-8535


Subchapter E. FEES

22 TAC §3.81, §3.82

The Texas Board of Architectural Examiners adopts amendments to Sections 3.81 and 3.82 for Title 22, Chapter 3, Subchapter E, pertaining to fees, as published in the December 19, 2003, issue of the Texas Register (28 TexReg 11209).

Section 3.81 is being adopted without changes, and the text will not be republished in the Texas Register . Section 3.82 is being adopted with changes.

The sections describe the method of establishing fees, the amounts of fees, the requirements related to paying fees, and the consequences of failing to pay the annual registration renewal fee.

The amendment to Section 3.81 adds the agency’s fee schedule to the section, clarifies that cash will not be accepted as payment for any fee, adds a reference to a processing fee to be charged if a check is returned unpaid by the bank upon which the check is drawn, and describes a fee exemption for members of the U.S. military who are on active duty status.

One change to the proposed amendment to §3.82 involves replacing the sentence "[a] registration certificate shall become invalid on its designated expiration date unless it is renewed" with "[a] person whose certificate of registration has expired may not engage in activities that require registration until the certificate of registration has been renewed" in Subsection (b). The other change replaces "registrant" with "Registrant" to denote a defined term.

The amendment to Section 3.82 describes the automatic cancellation provision enacted by the Legislature that will result in the automatic cancellation of any registration that remains delinquent for one year after its designated expiration date.

The Board received one comment pertaining to the proposal to amend these sections. The comment suggested that the Board should consider exempting members of the military from having to submit annual renewal forms when they are on active duty in a combat situation. The Board declined to take action to implement the suggestion because of the importance of maintaining current information related to all registrants.

The amendments are adopted pursuant to Section 1052.054 of the Tex. Occupations Code, which provides the Texas Board of Architectural Examiners with authority to establish fees as reasonable and necessary to cover the costs of administering its statutory duties, and pursuant to Sections 1051.353 and 1051.354 of the Tex. Occupations Code, which provide authority for the subsections regarding the automatic cancellation of registrations and the fee exemptions for members of the U.S. military.

§3.82.Annual Fees.

(a) The Board shall send an annual notice to each person who must pay a fee that is due annually. Each annual notice shall be sent to the intended recipient's current address of record. Every annual fee must be paid regardless of whether an annual notice is received.

(b) Every Registrant must pay his/her annual renewal fee on or before the designated expiration date of the Registrant’s certificate of registration. If a Registrant fails to pay his/her annual renewal fee on or before the designated expiration date of the Registrant’s certificate of registration, the Board shall require that the Registrant pay a penalty fee in addition to the registration renewal fee before the registration may be renewed. A person whose certificate of registration has expired may not engage in activities that require registration until the certificate of registration has been renewed.

(c) If a Registrant fails to renew his/her certificate of registration within one year after its designated expiration date, the certificate of registration shall be cancelled by operation of law without the opportunity for a formal hearing. The Board shall send a notice of pending cancellation to a Registrant who fails to renew his/her certificate of registration within one year after its designated expiration date. The notice shall be sent to the Registrant’s current address of record.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2004.

TRD-200401970

Cathy L. Hendricks, ASID/IIDA

Executive Director

Texas Board of Architectural Examiners

Effective date: April 4, 2004

Proposal publication date: December 19, 2003

For further information, please call: (512) 305-8535


Chapter 5. INTERIOR DESIGNERS

Subchapter B. ELIGIBILITY FOR REGISTRATION

22 TAC §5.31, §5.32

The Texas Board of Architectural Examiners adopts amendments to Sections 5.31and 5.32 for Title 22, Chapter 5, Subchapter B, pertaining to registration, as published in the December 19, 2003, issue of the Texas Register (28 TexReg 11210).

Section 5.31 is being adopted with changes. Section 5.32 is being adopted without changes, and the text will not be republished in the Texas Register .

The existing sections describe the general requirements for obtaining interior design registration by examination and by reciprocal transfer.

The only change to §5.31 as proposed removes the word "certified" from the phrase "other certified documentation."

The amendment to Section 5.31 adds a requirement that an applicant for registration by examination must provide verification that the applicant is legally in the United States pursuant to the Federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

The amendment to Section 5.32 modifies the requirements related to obtaining reciprocal registration by adding language that requires a reciprocal applicant to hold a registration that is active and in good standing in another jurisdiction that has registration requirements substantially equivalent to Texas registration requirements or that has entered into a reciprocity agreement with the Board that has been approved by the Governor of Texas. The proposed amendment reflects a recently enacted legislative change.

The agency received no comments pertaining to the proposals to amend these sections.

The amendments are adopted pursuant to Section 1051.202 of the Tex. Occupations Code, which provides the Texas Board of Architectural Examiners with general authority to adopt rules necessary to the administration of its statutory duties. The proposed amendment to the reciprocal registration rule is further authorized by Section 1051.305 of the Tex. Occupations Code, which allows the Board to grant reciprocal registration privileges only under certain specified circumstances.

§5.31.Registration by Examination.

(a) In order to obtain interior design registration by examination in Texas, an Applicant shall demonstrate that the Applicant has a combined total of at least six years of approved interior design education and experience and shall successfully complete the interior design registration examination as more fully described in Subchapter C. For purposes of this section, an Applicant has "approved interior design education" if:

(1) The Applicant graduated from a program that has been granted professional status by the Foundation for Interior Design Education Research (FIDER) or the National Architectural Accreditation Board (NAAB) or from an interior design education program outside the United States where an evaluation by World Education Services or another organization acceptable to the Board has concluded that the program is substantially equivalent to a FIDER or NAAB accredited professional program;

(2) The Applicant has a doctorate, a master's degree, or a baccalaureate degree in interior design;

(3) The Applicant has:

(A) A baccalaureate degree in a field other than interior design; and

(B) An associate's degree or a two- or three-year certificate from an interior design program at an institution accredited by an agency recognized by the Texas Higher Education Coordinating Board;

(4) The Applicant has:

(A) A baccalaureate degree in a field other than interior design; and

(B) An associate's degree or a two- or three-year certificate from a foreign interior design program approved or accredited by an agency acceptable to the Board;

(5) The Applicant applied on or before August 31, 2010, and prior to that date, the Applicant successfully completed:

(A) At least six years of actual experience working under the direct supervision of a registered interior designer or a registered architect;

(B) An associate's degree in interior design from an institution accredited by an agency recognized by the Texas Higher Education Coordinating Board; and

(C) Credit for the equivalent of at least 60 semester credit hours toward any baccalaureate degree; or

(6) The Applicant applied on or before August 31, 2010, and prior to that date, the Applicant successfully completed:

(A) At least four years of actual experience working under the direct supervision of a registered interior designer or a registered architect;

(B) A FIDER accredited pre-professional assistant level program; and

(C) Credit for the equivalent of at least 60 semester credit hours toward any baccalaureate degree.

(b) The Board shall evaluate the education and experience required by subsection (a) of this section in accordance with the Table of Equivalents for Education and Experience in Interior Design.

(c) For purposes of this section, the term "approved interior design education" does not include continuing education courses.

(d) An Applicant for interior design registration by examination who commences completion of the educational requirements for registration after September 1, 2006, must graduate from a program that has been granted professional status by FIDER.

(e) An Applicant for interior design registration by examination who commenced his/her interior design education or experience prior to September 1, 1999, shall be subject to the rules and regulations relating to educational and experiential requirements as they existed on August 31, 1999.

(f) For purposes of this section, an applicant shall be considered to have "commenced" his/her interior design education upon enrollment in an acceptable interior design education program.

(g) An Applicant who filed an application for registration without examination prior to August 31, 1994, is subject to the rules and regulations relating to educational and experiential requirements in effect at the time the application was filed. Such Applicant must complete the required six years of experience on or before September 1, 2003, in order to be eligible for registration without examination.

(h) In accordance with federal law, the Board must verify proof of legal status in the United States. Each Applicant shall provide evidence of legal status by submitting a certified copy of a United States birth certificate or other documentation that satisfies the requirements of the Federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996. A list of acceptable documents may be obtained by contacting the Board’s office.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2004.

TRD-200401971

Cathy L. Hendricks, ASID/IIDA

Executive Director

Texas Board of Architectural Examiners

Effective date: April 4, 2004

Proposal publication date: December 19, 2003

For further information, please call: (512) 305-8535


Subchapter C. EXAMINATION

22 TAC §5.51

The Texas Board of Architectural Examiners adopts an amendment to section 5.51 for Title 22, Chapter 5, Subchapter C, pertaining to the refund of examination fees, as published in the December 19, 2003, issue of the Texas Register (28 TexReg 11211).

The section is being adopted with changes.

The section describes requirements related to the general procedures for examination for interior design registration in Texas.

The amendment to section 5.51 adds a new section regarding refunds of examination fees. It states that the application fee is not refundable but that a portion of the examination fee paid to the national examination provider may be refunded if a candidate is precluded from taking or scheduling the examination because of extreme hardship. The new section requires the submission of a written request for refund within thirty days of the examination date. The new section states that an examination fee may not be transferred to a subsequent examination.

Changes to the amendments to section §5.51, as proposed include changing the phrase "date of the scheduled examination" to "date the examination was scheduled or intended to be scheduled" and adding "[a]pproval of the request [for a refund] and refund of the fee or portion of the fee by the national examination provider" as an additional condition for approving refunds of examination fees.

As a result of the amendment, the policy regarding refunds of examination fees will be readily available to persons who might be affected by the policy.

The board received no comments pertaining to the proposal to amend this section.

The amendment to this section is adopted pursuant to Section 1051.303 of Tex. Occupations Code Annotated ch. 1051, which directs the Texas Board of Architectural Examiners to adopt a comprehensive refund policy for examination fees.

§5.51.Requirements.

(a) Every Applicant for interior design registration by examination in Texas must successfully complete all sections of the National Council for Interior Design Qualification (NCIDQ) examination.

(b) The Board may approve an Applicant to take the NCIDQ examination only after the Applicant has completed the educational requirements for interior design registration by examination in Texas, has completed at least six (6) months of full-time experience working directly under the direct supervision of a licensed interior designer, and has submitted the required application materials.

(c) An Applicant may take the NCIDQ examination at any official NCIDQ testing center but must satisfy all Texas registration requirements in order to obtain interior design registration by examination in Texas.

(d) Each Candidate must achieve a passing score in each division of the NCIDQ examination. Scores from individual divisions may not be averaged to achieve a passing score.

(e) An examination fee may be refunded as follows:

(1) The application fee paid to the Board is not refundable or transferable.

(2) The Board, on behalf of a Candidate, may request a refund of a portion of the examination fee paid to the national examination provider for scheduling all or a portion of the registration examination. A charge for refund processing may be withheld by the national examination provider. Refunds of examination fees are subject to the following conditions:

(A) A Candidate, because of extreme hardship, must have been precluded from scheduling or taking the examination or a portion of the examination. For purposes of this subsection, extreme hardship is defined as a serious illness or accident of the Candidate or a member of the Candidate’s immediate family or the death of an immediate family member. Immediate family members include the spouse, child(ren), parent(s), and sibling(s) of the Candidate. Any other extreme hardship may be considered on a case-by-case basis.

(B) A written request for a refund based on extreme hardship must be submitted not later than thirty (30) days after the date the examination or portion of the examination was scheduled or intended to be scheduled. Documentation of the extreme hardship that precluded the applicant from scheduling or taking the examination must be submitted by the Candidate as follows:

(i) Illness: verification from a physician who treated the illness.

(ii) Accident: a copy of an official accident report.

(iii) Death: a copy of a death certificate or newspaper obituary.

(C) Approval of the request and refund of the fee or portion of the fee by the national examination provider.

(3) An examination fee may not be transferred to a subsequent examination.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2004.

TRD-200401972

Cathy L. Hendricks, ASID/IIDA

Executive Director

Texas Board of Architectural Examiners

Effective date: April 4, 2004

Proposal publication date: December 19, 2003

For further information, please call: (512) 305-8535


22 TAC §5.55

The Texas Board of Architectural Examiners adopts new section 5.55 for Title 22, Chapter 5, Subchapter C, pertaining to special accommodations for taking the registration examination for interior design registration in Texas, as published in the December 19, 2003, issue of the Texas Register (28 TexReg 11212).

The section is being adopted without changes, and the text will not be republished in the Texas Register .

New §5.55 describes the Board’s policy for ensuring that the examination process complies with the requirements of the Americans with Disabilities Act. It states that every registration examination must be conducted in an accessible place and manner or alternative accessible arrangements must be afforded so that no qualified individual with a disability is unreasonably denied the opportunity to complete the licensure process because of his/her disability; that special accommodations can be provided for examinees with physical or mental impairments that substantially limit major life activities; that available accommodations include the modification of examination procedures and the provision of auxiliary aids and services designed to furnish an individual with a disability an equal opportunity to demonstrate his/her knowledge, skills, and ability; that the Board is not required to approve every request for accommodation or auxiliary aid or provide every accommodation or service as requested; that the Board is not required to grant a request for accommodation if doing so would fundamentally alter the measurement of knowledge or the measurement of a skill intended to be tested by the examination or would create an undue financial or administrative burden; that the procedure for requesting accommodation will be (1) for an applicant requesting an accommodation to submit documentation regarding the existence of a disability and the reason the requested accommodation is necessary to provide the applicant with an equal opportunity to exhibit his/her knowledge, skills, and ability through the examination, (2) for an applicant requesting an accommodation to have a licensed health care professional or other qualified evaluator provide certification regarding the disability, and (3) for an applicant seeking an accommodation to make a request for accommodation on the prescribed form and provide documentation of the need for accommodation well in advance of the examination date; that to support a request for an accommodation or an auxiliary aid, the following information is required: (1) identification of the type of disability (physical, mental, learning), (2) information to substantiate the credentials of the evaluator, and (3) professional verification of the disability and the required accommodation; that documentation supporting an accommodation shall be valid for five (5) years from the date submitted to the Board except that no further documentation shall be required where the original documentation clearly states that the disability will not change in the future; that the Board has the responsibility to evaluate each request for accommodation and to approve, deny, or suggest alternative reasonable accommodations; that the Board may consider an Applicant's history of accommodation in determining its reasonableness in relation to the currently identified impact of the disability; and that information related to a request for accommodation shall be kept confidential to the extent provided by law.

The board received no comments pertaining to the proposal to adopt this new rule.

The new section is adopted pursuant to Section 1051.301 of Tex. Occupations Code Annotated ch. 1051, which directs the Texas Board of Architectural Examiners to adopt rules to ensure that examinations are administered in compliance with the Americans with Disabilities Act of 1990.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2004.

TRD-200401974

Cathy L. Hendricks, ASID/IIDA

Executive Director

Texas Board of Architectural Examiners

Effective date: April 4, 2004

Proposal publication date: December 19, 2003

For further information, please call: (512) 305-8535


Subchapter D. CERTIFICATION AND ANNUAL RENEWAL

22 TAC §5.75, §5.76

The Texas Board of Architectural Examiners adopts amendments to sections 5.75 and 5.76 for Title 22, Chapter 5, Subchapter D, pertaining to renewal and reinstatement, as published in the December 19, 2003, issue of the Texas Register (28 TexReg 11214).

The sections are being adopted with changes.

The sections describe the annual registration renewal procedure and the procedure for reinstating a registration that has been revoked, surrendered, or cancelled.

Changes to §5.75 involve removing text that differentiates "registration by examination" from "registration by reexamination" and deleting references to the requirement that the applicant complete the "current" registration examination.

The amendment to §5.75 will implement recently enacted statutory language regarding the automatic cancellation of any registration that is delinquent for one year. It states that a registration shall be cancelled by operation of law on the one-year anniversary of its expiration unless it is renewed before that time and that after such automatic cancellation, a registration may not be reinstated. If a registration is automatically cancelled pursuant to the section, the registrant will have to (1) submit an application for registration and satisfy all requirements for registration, including the successful completion of the registration examination; (2) submit an application for registration by reciprocal transfer and satisfy all requirements for registration by reciprocal transfer, including the successful completion of the registration examination; or (3) submit an application for registration and demonstrate that he or she moved to another state and is currently registered and has been in practice in the other state for at least the two years immediately preceding the date of the application. The proposed amendments also will implement recently enacted statutory language requiring interior designers to pay a $200 professional fee in addition to the annual registration renewal fee prescribed by the Board.

The change to §5.76 involves adding the phrase "by operation of law" in subsection (f) of the section. The purpose of the change is to clarify that the subsection applies only to cancellations that are effectuated by operation of law rather than to all cancellations.

The amendment to §5.76 will implement recently enacted statutory language regarding the reinstatement of a registration that has been revoked as a result of disciplinary action, surrendered in lieu of disciplinary action, or cancelled by operation of law due to the registrant’s failure to renew the registration. It requires that a revoked or surrendered registration may not be reinstated unless the applicant demonstrates that he or she has taken reasonable steps to correct the misconduct or deficiency that led to the revocation or surrender, demonstrates that approval of the application is not inconsistent with the Board’s duty to protect the public, and pays all fees and costs incurred by the Board as a result of any proceeding that led to the revocation or surrender. It also states that a registration cancelled due to the registrant’s failure to renew it may not be

The board received no comments pertaining to the proposal to amend these sections.

The amendments are adopted pursuant to Section 1051.353 of the Tex. Occupations Code, which directs the Texas Board of Architectural Examiners to cancel a registration that has been delinquent for one year and prohibits the reinstatement of a registration that was cancelled due to delinquency; pursuant to Section 1051.403 of the Tex. Occupations Code, which allows the Board to reinstate a revoked registration only after the reinstatement applicant pays all fees and costs associated with the revocation and also presents evidence to support the reinstatement; and pursuant to Section 1053.0521 of the Tex. Occupations Code, which prescribes a mandatory $200 professional fee for interior designers.

§5.75.Annual Renewal Procedure.

(a) The Board shall send an annual registration renewal notice to each Interior Designer at the Interior Designer's current address of record. An Interior Designer must notify the Board in writing each time the Interior Designer's address of record changes, and the written notice of the Interior Designer's change of address must be signed by the Interior Designer and submitted to the Board within sixty (60) days of the effective date of the change of address.

(b) An Interior Designer may renew his/her registration prior to its specified annual expiration date by:

(1) remitting the correct fee to the Board; and

(2) providing the information or documentation requested by the annual registration renewal notice and signing the renewal form to verify the accuracy of all information and documentation provided.

(c) If an Interior Designer fails to remit a completed registration renewal form and the prescribed fee on or before the specified expiration date of the Interior Designer's registration, the Board shall impose a late payment penalty that must be paid before the Interior Designer's registration may be renewed.

(d) If the Board receives official notice that an Interior Designer has defaulted on the repayment of a loan guaranteed by the Texas Guaranteed Student Loan Corporation (TGSLC), the Board may not renew the Interior Designer's registration unless:

(1) the renewal is the first renewal following the Board's receipt of official notice regarding the default;

(2) the Interior Designer presents to the Board a certificate from TGSLC certifying that the Interior Designer has entered into a repayment agreement for the defaulted loan; or

(3) the Interior Designer presents to the Board a Certificate from TGSLC certifying that the Interior Designer is not in default on a loan guaranteed by TGSLC.

(e) If the Board receives official notice that an Interior Designer has failed to pay court ordered child support, the Board may be prohibited from renewing the Interior Designer's registration.

(f) If a registration is not renewed within one (1) year after the specified registration expiration date, the registration shall be cancelled by operation of law on the one-year anniversary of its expiration without an opportunity for a formal hearing. If a registration is cancelled pursuant to this subsection, the registration may not be reinstated. In order to obtain a new certificate of registration, a person whose registration was cancelled pursuant to this subsection must:

(1) submit an application for registration and satisfy all requirements for registration pursuant to Section 5.31, including the successful completion of the registration examination;

(2) submit an application for registration by reciprocal transfer and satisfy all requirements for registration by reciprocal transfer pursuant to Section 5.32, including the successful completion of the registration examination; or

(3) submit an application for registration and demonstrate that he/she moved to another state and is currently licensed or registered and has been in practice in the other state for at least the two (2) years immediately preceding the date of the application.

(g) Each Interior Designer must pay a mandatory $200 professional fee in addition to the annual registration renewal fee prescribed by the Board.

§5.76.Reinstatement.

(a) Once the revocation, cancellation, or surrender of an Interior Designer's registration is effective, the registration may be reinstated only after an application for reinstatement is properly submitted and approved and the prescribed reinstatement fee is paid.

(b) If a reinstatement Applicant has used the title "interior designer" or the term "interior design" in violation of the Interior Designers' Registration Law since the effective date of the revocation, cancellation, or surrender of the Applicant's registration, the reinstatement fee to be paid upon approval of the application shall include an amount equal to the sum of the registration renewal fees for each year since the effective date of the revocation, cancellation, or surrender.

(c) An application for reinstatement may be denied on the following grounds:

(1) the registration has been revoked for a continuous period of five (5) years or longer; or

(2) the reinstatement Applicant has performed an act, omitted an act or allowed an omission, or otherwise engaged in a practice that could serve as the basis for the rejection of an application for registration or for the revocation of a registration; or

(3) the registration was voluntarily surrendered in lieu of potential disciplinary action and the Board finds that the approval of the reinstatement application does not appear to be in the public's interest.

(d) If at least five (5) years have passed since the effective date of the revocation, cancellation, or surrender of a registration, one of the following shall be required prior to approval of an application for reinstatement:

(1) successful completion of all sections of the current registration examination during the five (5) years immediately preceding reinstatement; or

(2) verification that the Applicant currently holds an interior design registration that is active and in good standing in another jurisdiction where the registration requirements are substantially equivalent to Texas interior design registration requirements.

(e) If a registration was revoked as a result of disciplinary action or surrendered in lieu of disciplinary action, the registration shall not be reinstated unless the Applicant:

(1) demonstrates that the Applicant has taken reasonable steps to correct the misconduct or deficiency that led to the revocation or surrender;

(2) demonstrates that approval of the application is not inconsistent with the Board’s duty to protect the public by ensuring that registrants are duly qualified and fit for registration; and

(3) pays all fees and costs incurred by the Board as a result of any proceeding that led to the revocation or surrender.

(f) If a registration is cancelled by operation of law due to the Registrant’s failure to renew the registration within one (1) year after its designated expiration date, the registration may not be reinstated.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2004.

TRD-200401973

Cathy L. Hendricks, ASID/IIDA

Executive Director

Texas Board of Architectural Examiners

Effective date: April 4, 2004

Proposal publication date: December 19, 2003

For further information, please call: (512) 305-8535


Subchapter E. FEES

22 TAC §5.91, §5.92

The Texas Board of Architectural Examiners adopts amendments to Sections 5.91 and 5.92 for Title 22, Chapter 5, Subchapter E, pertaining to fees, as published in the December 19, 2003, issue of the Texas Register (28 TexReg 11215).

Section 5.91 is being adopted without changes, and the text will not be republished in the Texas Register . Section 5.92 is being adopted with changes

The existing sections describe the method of establishing fees, the amounts of fees, the requirements related to paying fees, and the consequences of failing to pay the annual registration renewal fee.

The amendment to Section 5.91 adds the agency’s fee schedule to the section, clarifies that cash will not be accepted as payment for any fee, adds a reference to a processing fee to be charged if a check is returned unpaid by the bank upon which the check is drawn, and describes a fee exemption for members of the U.S. military who are on active duty status.

One change to the proposed amendment to §5.92 involves replacing the sentence "[a] registration certificate shall become invalid on its designated expiration date unless it is renewed" with "[a] person whose certificate of registration has expired may not engage in activities that require registration until the certificate of registration has been renewed" in Subsection (b). The other change replaces "registrant" with "Registrant" to denote a defined term. The amendment to Section 5.92 describes an automatic cancellation provision enacted by the Legislature that will result in the automatic cancellation of any registration that remains delinquent for one year after its designated expiration date.

The Board received one comment pertaining to the proposal to amend these sections. The comment suggested that the Board should consider exempting members of the military from having to submit annual renewal forms when they are on active duty in a combat situation. The Board declined to take action to implement the suggestion because of the importance of maintaining current information related to all registrants.

The amendments are adopted pursuant to Section 1053.052 of the Tex. Occupations Code, which provides the Texas Board of Architectural Examiners with authority to establish fees as reasonable and necessary to cover the costs of administering its statutory duties, and pursuant to Sections 1051.353 and 1051.354 of the Tex. Occupations Code, which provide authority for the subsections regarding the automatic cancellation of registrations and the fee exemptions for members of the U.S. military.

§5.92.Annual Fees.

(a) The Board shall send an annual notice to each person who must pay a fee that is due annually. Each annual notice shall be sent to the intended recipient's current address of record. Every annual fee must be paid regardless of whether an annual notice is received.

(b) Every Registrant must pay his/her annual renewal fee on or before the designated expiration date of the Registrant’s certificate of registration. If a Registrant fails to pay his/her annual renewal fee on or before the designated expiration date of the Registrant’s certificate of registration, the Board shall require that the Registrant pay a penalty fee in addition to the registration renewal fee before the registration may be renewed. A person whose certificate of registration has expired may not engage in activities that require registration until the certificate of registration has been renewed.

(c) If a Registrant fails to renew his/her certificate of registration within one year after its designated expiration date, the certificate of registration shall be cancelled by operation of law without the opportunity for a formal hearing. The Board shall send a notice of pending cancellation to a Registrant who fails to renew his/her certificate of registration within one year after its designated expiration date. The notice shall be sent to the Registrant’s current address of record.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 15, 2004.

TRD-200401975

Cathy L. Hendricks, ASID/IIDA

Executive Director

Texas Board of Architectural Examiners

Effective date: April 4, 2004

Proposal publication date: December 19, 2003

For further information, please call: (512) 305-8535


Part 22. TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY

Chapter 501. RULES OF PROFESSIONAL CONDUCT

Subchapter C. RESPONSIBILITIES TO CLIENTS

22 TAC §501.72

The Texas State Board of Public Accountancy adopts an amendment to §501.72, concerning Contingency Fees without changes to the proposed text as published in the January 30, 2004, issue of the Texas Register (29 TexReg 756). The text of the rule will not be republished.

The amendment to §501.72 will bring the board's rule into conformity with the contingent fee arrangements that are allowed by the Securities and Exchange Commission's rules, clarifies contingent fees and tax returns.

The amendment will function by bringing the board's rule into conformity with the Securities and Exchange Commission's rules.

No comments were received regarding adoption of the amendment.

The amendment is adopted 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 the adoption.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 18, 2004.

TRD-200402027

Rande Herrell

General Counsel

Texas State Board of Public Accountancy

Effective date: April 7, 2004

Proposal publication date: January 30, 2004

For further information, please call: (512) 305-7848


22 TAC §501.78

The Texas State Board of Public Accountancy adopts new §501.78, concerning Withdrawal or Resignation without changes to the proposed text as published in the January 30, 2004, issue of the Texas Register (29 TexReg 757). The text of the rule will not be republished.

The new rule will give licensees guidance as to when they must withdraw from an engagement or employment.

The new rule will function by giving licensees guidance from the board as to when they must withdraw from an engagement or employment.

No comments were received regarding adoption of the rule.

The new rule is adopted 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 the adoption.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 18, 2004.

TRD-200402028

Rande Herrell

General Counsel

Texas State Board of Public Accountancy

Effective date: April 7, 2004

Proposal publication date: January 30, 2004

For further information, please call: (512) 305-7848


Chapter 523. CONTINUING PROFESSIONAL EDUCATION

The Texas State Board of Public Accountancy adopts the repeal of Chapter 523, Subchapter A: §523.1, concerning CPE Purpose and Definitions; §523.2, concerning Standards for CPE Program Development; §523.3, concerning Savings Provisions and Dispositions Table; Subchapter B: §523.21, concerning Establishment of Mandatory CPE Program; §523.22, concerning Mandatory CPE Reporting; §523.23, concerning Mandatory CPE Attendance; §523.24, concerning Denial of a License; §523.25, concerning Disciplinary Actions Relating to CPE; §523.26, concerning Credits for Instructors and Discussion Leaders; §523.27, concerning Credits for Published Articles and Books; §523.28, concerning Minimum Hours Required Per CPE Reporting Period as a Participant; §523.29, concerning Limitation for Non-Technical Courses; §523.30, concerning Alternative Sources of CPE; §523.31, concerning Standards for CPE Reporting; §523.32, concerning CPE for non-CPA Owners; §523.34, concerning Course Content and Board Approval after September 1, 2003; Subchapter C: §523.41, concerning Board Rules and Ethics Course; §523.43, concerning Course Content and Board Approval; Subchapter D: §523.51, concerning Program Standards; §523.52, concerning Evaluation; §523.53, concerning Program Time Credit Measurement; §523.54, concerning Sponsor's Record; §523.55, concerning Board Contracted CPE Sponsors; §523.56, concerning Obligations of the Sponsor; §523.57, concerning Registry of CPE Sponsors; and §523.58, concerning Sponsor Review Oversight Program without changes to the proposal as published in the January 30, 2004, issue of the Texas Register (29 TexReg 757).

The repeal of §§523.1 - 523.3, 523.21 - 523.32, 523.34, 523.41, 523.43 and 523.51 - 523.58 will remove these rules so they can be replaced with re-written and renumbered rules.

The repeals will function by replacing these rules with re-written and renumbered rules.

No comments were received regarding adoption of these repeals.

Subchapter A. CONTINUING PROFESSIONAL EDUCATION PURPOSE AND DEFINITIONS

22 TAC §§523.1 - 523.3

The repeals are adopted 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 §901.411 which authorizes the board to adopt rules regarding continuing professional education.

No other article, statute or code is affected by the adoption.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 18, 2004.

TRD-200402029

Rande Herrell

General Counsel

Texas State Board of Public Accountancy

Effective date: April 7, 2004

Proposal publication date: January 30, 2004

For further information, please call: (512) 305-7848


Subchapter B. CONTINUING PROFESSIONAL EDUCATION RULES FOR INDIVIDUALS

22 TAC §§523.21 - 523.32, 523.34

The repeals are adopted 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 §901.411 which authorizes the board to adopt rules regarding continuing professional education.

No other article, statute or code is affected by the adoption.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 18, 2004.

TRD-200402030

Rande Herrell

General Counsel

Texas State Board of Public Accountancy

Effective date: April 7, 2004

Proposal publication date: January 30, 2004

For further information, please call: (512) 305-7848


Subchapter C. ETHICS RULES: INDIVIDUALS AND SPONSORS

22 TAC §523.41, §523.43

The repeals are adopted 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 §901.411 which authorizes the board to adopt rules regarding continuing professional education.

No other article, statute or code is affected by the adoption.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 18, 2004.

TRD-200402031

Rande Herrell

General Counsel

Texas State Board of Public Accountancy

Effective date: April 7, 2004

Proposal publication date: January 30, 2004

For further information, please call: (512) 305-7848


Subchapter D. STANDARDS FOR CONTINUING PROFESSIONAL EDUCATION PROGRAMS AND RULES FOR SPONSORS

22 TAC §§523.51 - 523.58

The repeals are adopted 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 §901.411 which authorizes the board to adopt rules regarding continuing professional education.

No other article, statute or code is affected by the adoption.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 18, 2004.

TRD-200402032

Rande Herrell

General Counsel

Texas State Board of Public Accountancy

Effective date: April 7, 2004

Proposal publication date: January 30, 2004

For further information, please call: (512) 305-7848


Chapter 523. CONTINUING PROFESSIONAL EDUCATION

Subchapter A. CONTINUING PROFESSIONAL EDUCATION PURPOSE AND DEFINITIONS

22 TAC §§523.101 - 523.103

The Texas State Board of Public Accountancy adopts new rules §523.101 concerning Savings Provisions and Dispositions Table, §523.102 concerning CPE Purpose and Definitions and §523.103 concerning Standards for CPE Program Development in Chapter 523, Subchapter A without changes to the proposed text as published in the January 30, 2004, issue of the Texas Register (29 TexReg 759). The text of the rules will not be republished.

The new rules are adopted for renumbering purposes and, because the CPE rules are being repealed and renumbered, to correct references to section numbers. New §523.101 contains a chart showing the disposition of the rules under the new numbering system. New §523.102 corrects one typographical error from the original rule, by changing the word "reasonable" to "reasonably".

The new rules will function by correcting references to section numbers, renumbering the rules and correcting one typographical error.

No comments were received regarding adoption of the rules.

The new rules are adopted 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 §901.411 which authorizes the board to promulgate rules regarding continuing professional education.

No other article, statute or code is affected by these adoptions.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 18, 2004.

TRD-200402033

Rande Herrell

General Counsel

Texas State Board of Public Accountancy

Effective date: April 7, 2004

Proposal publication date: January 30, 2004

For further information, please call: (512) 305-7848


Subchapter B. CONTINUING PROFESSIONAL EDUCATION RULES FOR INDIVIDUALS

22 TAC §§523.110 - 523.121

The Texas State Board of Public Accountancy adopts new rules §523.110 concerning Establishment of Mandatory CPE Program; §523.111 concerning Mandatory CPE Reporting; §523.112 concerning Mandatory CPE Attendance; §523.113 concerning Denial of a License; §523.114 concerning Disciplinary Actions Relating to CPE; §523.115 concerning Credits for Instructors and Discussion Leaders; §523.116 concerning Credits for Published Articles and Books; §523.117 concerning Minimum Hours Required Per CPE Reporting Period as a Participant; §523.118 concerning Limitation for Non-Technical Courses; §523.119 concerning Alternative Sources of CPE; §523.120 concerning Standards for CPE Reporting and §523.121 concerning CPE for non-CPA Owners in Chapter 523, Subchapter B without changes to the proposed text as published in the January 30, 2004, issue of the Texas Register (29 TexReg 761). The text of the rules will not be republished.

Sections 523.110 through 523.121 are adopted for renumbering purposes and, because the CPE rules are being repealed and renumbered, to correct references to section numbers. New §523.101 contains a chart showing the disposition of the rules under the new numbering system. In addition, the effective date of §523.112 is changed to December 31, 2005.

The new rules will function by correcting references to section numbers, renumbering the rules and §523.112 will have an implementation date that allows adequate time for preparation.

No comments were received regarding adoption of the rules.

The new rules are adopted 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 §901.411 which authorizes the board to promulgate rules regarding continuing professional education.

No other article, statute or code is affected by these adoptions.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 18, 2004.

TRD-200402034

Rande Herrell

General Counsel

Texas State Board of Public Accountancy

Effective date: April 7, 2004

Proposal publication date: January 30, 2004

For further information, please call: (512) 305-7848


Subchapter C. ETHICS RULES: INDIVIDUALS AND SPONSORS

22 TAC §§523.130 - 523.133

The Texas State Board of Public Accountancy adopts new rules §523.130 concerning Board Rules and Ethics Course; §523.131 concerning Board Approval of Ethics Course Content after January 1, 2005; §523.132 concerning Board Contracted Ethics Instructors after January 1, 2005 and §523.133 concerning Course Content and Board Approval in Subchapter C with changes to the proposed text in §523.132 as published in the January 30, 2004, issue of the Texas Register (29 TexReg 764). Sections 523.130, 523.131, and 523.133, are adopted without changes and the text of the rules will not be republished. In response to some of the written comments and oral presentations that were received at the public hearing on March 16, 2004, the Rules Committee recommended some changes to the Board. The Board agreed with the recommendations and made some non-substantive changes to proposed rule 523.132. The changes to 523.132 moved the substantially equivalent language from the end to the beginning of subsection (b)(1), deleted "in an ethics course" in subsection (b)(1) because it was redundant, moved the substantially equivalent language from the end to the beginning of subsection (b)(2), added "discipline for" in subsection (b)(4) to clarify that the prohibition is based on a violation that resulted in discipline being imposed which makes it consistent with subsection (a)(2), deleted subsection (c) because there is no need to apply for an exemption as each application will be fully scrutinized to insure the applicant meets the requirements, and renumbered former subsections (d) and (e) to subsections (c) and (d).

The new rules §§523.130, 523.131, 523.132 and 523.133 are adopted new for renumbering purposes and, because the CPE rules are being repealed and renumbered, to correct references to section numbers. New §523.101 contains a chart showing the disposition of the rules under the new numbering system. In addition, these rules will re-create and continue the board rules and ethics course program. Rule 523.130 continues the requirement of a two-hour ethics course every three years until December 31, 2004, with changes to the previous rule. After January 1, 2005, licensees must complete a board-approved four hour ethics course every two years. Ethics by self-study is no longer an option. Out-of-state licensees must complete their ethics course by live-instructor format or by computer-based interactive format, or request an exemption. After January 1, 2005, licensees who take ethics courses that are either not board-approved or taught by instructors not under contract with the board will not receive ethics course credit and will instead receive non-technical CPE credit. Retired, disabled or otherwise exempt licensees who change their exempt status must complete a board-approved ethics course. The rule provides for transition to the new 4 hour course and 2 year requirements. Rule 523.131 is a new rule creating a requirement that ethics course contents must be board approved. The new rule contains the procedure and criteria for applying for initial approval and renewed approval of course content. Rule 523.132 creates the requirement that, starting January 1, 2005, ethics course instructors must be board approved. The rule contains the procedure and criteria for applying for instructor approval, with an interpretive comment at the end. Rule 523.133 is simply being re-numbered.

The new rules will function by re-creating and continuing the board rules and ethics course program. CPAs will be taking more hours of board-approved ethics courses that are being taught by board-approved instructors. In addition, the rules will function by correcting references to section numbers and renumbering the rules.

Several comments were received by the board. The comments and the board's response are listed in the following paragraphs.

Dr. Nita J. Clyde submitted comments on behalf of the Texas Society of Certified Public Accountants on proposed §523.132. Dr. Clyde believes that the rule's failure to provide appropriate guidance about the qualifications for the ethics course instructors will exclude qualified instructors from participating in the program. The college ethics teaching experience and completion of college ethics courses requirements are unnecessarily exclusive and do not guarantee a good or adequate instructor. While teaching experience is important, experience in making ethical decisions should be accepted as a substitute for these requirements. Experienced quality instructors who do not meet these requirements will be forced to apply for an exception. It is likely more instructors will qualify through exception than qualify through board rules, and it makes no sense to require qualified instructors to apply for a waiver or exception. The board pre-approves ethics courses, requires instructors to complete ethics instructor training and to enter into a contract to deliver effective instruction; additional requirements are unnecessary.

Mr. Barry King also submitted comments. He has no problem with the proposed changes to the content of the ethics courses, but takes exception to the requirement that instructors be experienced college instructors because college professors are steeped in academia and lack practical experience. Mr. King perceives the college ethics teaching experience and completion of college ethics courses requirements as a direct insult to him because he has been an ethics instructor for years. He is concerned that the board is overreacting or incorrectly reacting to recent profession ethics failures. Ethics courses will not make a person act ethically because any one old enough to be a CPA already has their ethics and morals established. It is impossible to apply the letter of the law and rules to every situation.

Dr. Sammie Smith, Professor of Accounting at Stephen F. Austin State University, submitted comments and questions. The proposed rules still need additional work and considerable input from the profession that cannot be achieved during the two hours allotted for the public hearing on the proposed rules. The objectives stated in proposed §523.130 cannot be accomplished in a four-hour course taken every two years. The objectives stated in proposed §523.131 have good intentions but cannot be practically accomplished in a four-hour course. Many experts question whether ethical conduct can be taught. Proposed §523.132 has many problems. He questions whether a six hour college ethics course can achieve ethics teaching expertise and points out that to complete the six hours will require two courses. He asks what constitutes substantially equivalent educational experience and why there is an in-house governmental entity exemption. Full time college teaching experience does not translate into the ability to teach ethics. Instructors that represent clients before the board are more knowledgeable and informed about ethics and are more qualified to teach ethics. Dr. Smith doubts the proposed rule will withstand judicial scrutiny. The profession needs to reverse the changes of the last 20 years that were caused by the profit motives of a minority through a needed ethics indoctrination that promotes a cultural revolution but the proposed rules will not do it because they need a lot of work and significant input from the profession.

Mr. Jacob Bezner commented on proposed §523.132. He noted that attorneys are allowed to represent clients in court and teach continuing legal education courses. He encourages the use of ethics instructors with both academic and practical experience.

Ms. Karen Williams commented that proposed §523.131(a) (1) (2) and (3) should be changed to read "course shall be designed to reinforce" rather than "designed to teach." She also commented on proposed §523.132. There should not be any exemptions for in-house government entities and substantially equivalent because everyone should comply with the same rules. Instructors that represent CPAs in Board proceedings have a better working knowledge of the rules. Requiring six credit hours in ethics is too restrictive, unnecessary and might be expensive because very few colleges offer ethics courses. Although college level ethics teaching experience is great, it is inappropriate to use non-experience as a reason to deny someone the right to teach a board ethics course. Ms. Williams asks why there are different requirements for an ethics instructor and non-ethics CPE instructors.

Mr. Kenneth Horwitz objected to the requirement that a written copy of his testimony be filed with the Board by February 27. Mr. Horwitz claims this violates the 30 day notice provision of Government Code section 2001.023. Mr. Horwitz also objected to the board's voting on the proposed rules during its meeting two days after the public hearing on the proposed rules because two days is inadequate time for the board to confirm the facts presented at the public hearing. Mr. Horwitz claims this violates Government Code sections 2001.029(a) and 2001.029(c). Mr. Horwitz also contends that limiting the public hearing to two hours violates Texans' right to present their views to their government. Mr. Horwitz submitted extensive comments. The board's estimated cost to enforce the new rules erroneously omits the cost of completing the college courses, the cost of teaching at the college level, the cost to acquire work experience as a CPA, and the cost of not violating the Rules of Professional Conduct. The board's estimated cost for a person to comply with the proposed rules erroneously underestimates the time by 1/2 an hour at $35 per hour times 50,000 CPAs and omits inflation. The board's determination that the proposed rules will not have an adverse economic impact on small businesses is incorrect because he believes the cost will be $1 million. The board lacks statutory authority to regulate the qualifications of course instructors. The proposed rule confuses conflict of interest because of representation before the board with a conflict with the ethics rules. The only ethics instructors who will qualify are TSCPA instructors, this creates a monopoly and this monopoly requires all board members who are also TSCPA members to recuse themselves from voting on the proposed rules. The proposed rules are vague and this suggests the possibility of violation of Due Process by the Board when considering exceptions. Enron and other accounting and ethics failures demonstrate the lack of success of ethics rules and the proposed rules are a continuation of the demonstrably unsuccessful rules. The college ethics course and college level teaching requirements are anti-competitive, are bad public policy and omit persons with practical experience. CPAs acquire their ethical and moral standards from family and religion and these would be little enhanced by college level courses. The board performs a disservice to CPAs when it omits an attorney that represents CPAs before the board because of his experience with real accounting practice situations. The State Bar's ratio of general courses to ethics course is recommended. The board spends almost all its CPE regulatory effort on the ethics course and little effort regulating other CPE causing the non-ethics CPE to suffer from little regulation and oversight. The board is engaging in illegal rule making by singling out an ethics instructor.

Mr. John A. Anderson, Jr. is in favor of the proposed rules but prefers the ethics requirements be the same for all states. He is certified in Texas and Louisiana and professional ethics should be the same in each state.

Mr. Mark H. Andrus submitted comments on the proposed rules. The proposed changes only increase the number of hours of CPE that has not made any real difference in accounting ethics. Enron-type failures occur because CPAs ignore ethics and are more interested in keeping their client happy. College professors and non-lawyers are not the best sources of information about accounting ethics. The requirements will reduce the number of possible instructors, create a favorable situation for these instructors and appear to have been drafted to exclude a particular instructor. Proposed §523.119 requires pre-approval for alternative CPE courses and, because many of the courses he takes have not been submitted for approval by the sponsoring organization, he suggests extending §523.121's acceptance as CPE courses non-CPA professional designation required courses.

Mr. Donald M. Clanton applauded the board's efforts to require ethical behavior, but believed the rules should be applicable to everyone in a CPA firm. Mr. Clanton believes subsections 523.131(1)-(4) are vague when they should be plainly stated and easy to understand. He also believes §523.132 is obviously intended to exclude a particular person as an ethics instructor, and it should be re-written to insure that the most competent and qualified instructors teach ethics to all members of a CPA firm. He commended the board for scheduling a public hearing on the proposed rules and requested more publicity about future public hearings.

Mr. Roger Thaxton suggested the board ignore professional associations' rules because their agendas are opposed to the board's goals. The board's rules should be very clearly stated, easily understood and highly publicized so all CPAs can know what behavior is expected. Ethics should be taught only by psychologists and psychiatrists because of the behavioral issues and should be taught only in a live face to face format for an exchange of ideas. Computerized or CD ethics courses should be prohibited.

Mr. Muhammed Ali Baig appreciates the board's efforts to improve the profession's ethical standards and endorses the increase in ethics course hours. Subsection 523.130(f) should not be enacted because it is redundant to subsection (e). Subsection 523.130(d) should be modified to remove any reference to place of residence. The intent of §523.131 is vague and both intent and commercial exploitation should be defined and explained to adequately inform licensees. Mr. Baig questions whether the deletion of "or she" in §523.132 means that ethics instructors have to be males. Mr. Baig awaits the board's reasoning for subsection (b)'s requirements for ethics instructors. He disagrees that representing someone before the board creates a conflict of interest with being an ethics instructor.

Mr. Dennis Fernelius doubts ethical reasoning should be taught to CPAs because individuals acquire their morals and ethics by age 7 or 8. Honest and ethical CPAs can run afoul of the Board because of a lack of knowledge of the rules and current practice knowledge. Current CPE rules do not require CPE in a CPA's area of practice. He questions whether a significant number of peer review problems are caused by CPAs' failure to maintain professional knowledge and asks how CPAs can stay abreast of the constant changes to the board's rules. He proposes a rule that requires a solid ethics course covering the rules, rule changes and how the rule changes affect a CPA, combined with CPE in the CPA's field of practice. The ethics instructor requirements are restrictive and subject to board interpretation which will limit the number of instructors and will increase the cost of CPE courses.

Dr. Raymond J. Clay believes a significant portion of the ethics course should focus on ethical principles, moral values and societal norms because periodic reminders help reassess beliefs and provide a benchmark to compare personal and professional behavior. Another important element of the course should be ethical reasoning and its application to situational dilemmas. A third component of the course should be a periodic review of the rules, an examination of historical events involving CPAs and the application of standards and ethical principles of professional conduct.

Mr. Larry Swift said there is no conflict of interest with an ethics instructor representing licensees before the board.

Mr. Frank Chovanetz questions whether four hours is enough time for an ethics course, how 6 hours of college credit provides experience, whether experience matters, why there is an in-house governmental entity exemption and how representing a client before the board can be a conflict of interest for an ethics instructor. Such an instructor would be more knowledgeable and informed about the rules and ethics.

Mr. Carl Bowles provided comments on behalf of the Texas Association of Certified Public Accountants. Proposed §523.130 increases the frequency and duration of ethics courses creating additional demand on a limited instructor pool which will increase travel time and expense for CPAs that reside outside major cities and out of state. The introductory parts of proposed §523.131 subsections (a) (1)-(3) emphasize original education and should be re-written to emphasize continuing education. The breadth of material cannot be adequately covered in one four hour course. Subsection (a)(4) requiring case study coupled with proposed §523.140(j) requiring smaller class sizes for case studies increases the demand for instructors. Proposed §523.132 is too restrictive because it disqualifies applicants that were disciplined for nonpayment of license fees. The proposed rule favors academic training over practical experience but practical experience is an essential component of ethics education. The proposed rules should encourage a larger pool of instructor applicants with a broad range of knowledge and experience rather than discourage them. The in-house governmental entity exemption is unjustified and should be deleted. There is no conflict of interest and the provision diminishes the quality of the ethics instructor pool.

Mr. Richard Forrest challenges the constitutionality of proposed rules 523.131(f), 523.11(a) (4) (C) and 523.132(e) as prior restraints on free speech. Substantially all instructors of continuing education courses do so for marketing reasons. Proposed §523.132(e) violates the constitution's equal protection clause because the rule applies solely to him and is arbitrary, capricious, retaliatory and usurps the authority of the State Bar and the Texas Supreme Court to regulate attorneys. There is no more of a conflict of interest with him than there is a conflict of interest between the board and a board enforcement attorney. Proposed rules 523.101, 523.103, 523.110-523.121, 523.130-523.133, and 523.140-147 exceed the board's authority to regulate continuing education. Mr. Forrest attached and adopted in its entirety his letter to the board dated October 25, 2002 regarding his comments to then proposed and now adopted §523.71 ("October Letter"). The October Letter challenged the board's authority to regulate or charge fees to educators or continuing professional education providers or to regulate course providers and said the board only has authority to regulate courses and course content by accepting or rejecting completed courses tendered by CPAs based on whether the courses do or do not contribute to that CPA's competence.

In response to these comments: As to questions about the legality of the proposed rules, the board's statutory authority to enact these rules and the alleged actual and potential constitutional violations, the proposed rules were reviewed by the board's General Counsel who assured the board that it had the authority to promulgate these rules and that these rules were Constitutionally appropriate.

The board has no objection to an ethics instructor benefiting from the name exposure that comes with teaching an ethics course. What the board does object to is the commercial exploitation of a state sponsored function for the promotion of other products and services offered by the instructor.

It has been suggested that such a prohibition is an illegal restraint on commercial free speech. Commercial free speech gives one the right to advertise their products and services. It does not require the board to provide a venue in which to advertise private product lines and services. The purpose behind the ethics course is to reinforce and promote ethical behavior in CPAs, not provide a captive audience for commercial exploitation by the instructor.

The proposed rules do not deny any provider the right to offer a course on the board's rules and how to circumvent them. The board believes that such a course is not consistent with the board's goal of protection of the public. Therefore, such a course would not qualify for credit to satisfy the ethics course requirement. However, a CPA who wishes to take such a course can still obtain credit for non-technical CPE.

The board is not installing the college ethics requirements because they will guarantee or secure good instructors, but because it considers the requirements to be part of several factors that might help enhance the quality and professionalism of an instructor's ethics teaching experience and teaching of ethics.

The purpose of the new rules is to raise standards for ethics instructors. How can the board expect an instructor to teach that which he has never studied? The board realizes that accounting departments have only recently begun offering stand-alone ethics courses to accounting majors. The board wants to encourage prospective ethics instructors to avail themselves of instruction in ethical reasoning. Substantial equivalency is available to prospective ethics instructors who have not taken and are unable to take a stand-alone course. The board agrees that experience is important, hence the rule also has a 10 year experience requirement.

The purpose of the new rules is to insure that the ethics course is not the first course ever taught by the prospective instructor. The board agrees that college level teaching experience is no guarantee of a good instructor, but it is a better predictor than no teaching experience at all. Again, substantial equivalency is available to those who can demonstrate teaching adults for a similar duration in an environment that would encourage development of the requisite teaching skills.

The board has not rejected current or potential instructors who do not meet the proposed college ethics requirements but possess the appropriate experience or other qualifications to teach ethics courses for the board; the substantially equivalent educational experience and substantially equivalent teaching experience waiver or exception was created for them.

The board realizes that a few instructors may not meet the literal requirements for educational experience and teaching experience, but have other experience that is just as good that would make them good ethics instructors. The board wants the flexibility to retain these good instructors while setting standards high for instructor qualifications.

The board did not draft these rules to exclude any person; indeed the board is unaware of whether any particular person qualifies under the proposed rules as an instructor or would qualify under the exceptions.

The board seeks ethics instructors with the highest standards of professional conduct. CPAs who violate the Code of Professional Conduct do not exhibit that trait. Temporary suspension of a license for non-payment of license fees is not a violation of the board's Code of Professional Conduct that would bar a CPA from becoming an ethics instructor.

Based on the legal staff's experience, the board's licensees do want to behave ethically as demonstrated by licensees regularly calling or writing the legal staff requesting preventive advice, guidance, information and clarification. Therefore, the board disagrees with the assertions that CPAs cannot be taught ethics or cannot have their ethics improved.

Although there is a limit on the length of the public hearing to receive oral testimony, no limit was imposed on the number of written comments or the length of individual written comments that the board will receive and consider. The board heard every person who requested to speak at the public hearing.

"Substantially equivalent" was not defined in order to allow the applicants flexibility in their submissions to the board and to allow the board to exercise discretion.

In response to comments that the proposed rules need professional input and further work, this is being accomplished through publication of the proposed rules and notice of the public hearing in the Texas Register , by soliciting comments such as these, by conducting the public hearing and receiving testimony from the profession, and by consideration of written comments such as these.

The example of the attorney in court that also teaches continuing legal education courses fails because the attorney is not under contract with the judiciary to teach continuing education, the judiciary does not offer continuing education, the judiciary is separate from and independent of the State Bar, and it is the State Bar that offers continuing education courses.

Because ethics instructors are under contract with the board, the board wishes to avoid the appearance of a conflict by not allowing contracted ethics instructors to represent parties in a disciplinary dispute before the board. The State Bar allows their CLE instructors to represent clients in court, but attorneys are not under contract with the courts to provide CLE. The IRS allows CPAs to both teach CPE and represent clients at the IRS but again, the CPAs are not under contract with the IRS.

It was suggested that there should be no exceptions, but the board prefers to exercise discretion in order to attract and keep qualified instructors, improve course content and take the greatest measures practically available to protect the public.

The requirements for ethics instructors are different than for non-ethics instructors because professional ethics currently requires more attention and direction.

All CPE instructors should have the requisite education and teaching skills to teach their respective CPE subjects. The board is addressing the quality of all CPE courses through the Sponsor Review Oversight Board. The board has chosen to begin the process of insuring the quality of all CPE courses and instructors with the board's rules regarding the required ethics course.

The estimated cost to enforce the proposed rules is the board's costs, and these are estimated to be minimal.

The estimated cost to comply with the proposed rules is the estimated cost for one instructor-applicant to comply, not the total cost for the universe of CPE instructors and students, and this is estimated to be only $20 per person including inflation.

The board believes that any cost increase will be minimal. The current requirement is that CPAs take 120 hours of CPE in a three year period, 2 of which must be ethics. The change merely increases the number of hours that must be in ethics, not the overall number of required hours. The cost for a live instructor or inter-active computer format ethics course is not anticipated to be any more than for a similarly formatted course in another area.

The board's conclusion that there will be no adverse economic effect is based on the effect on one small business, not the effect on all CPA firms. As of February 19, 2004, there were 9,352 registered CPA firms. Using Mr. Horwitz' $1 million and excluding the Big Four, the economic effect is only $107 per year per CPA firm and some are not small businesses ($1 million divided by 9348). The sum of $107 per year is not an adverse economic effect.

As a matter of fact, the board spends most of its regulatory effort enforcing the rules on non-ethics continuing professional education courses than on its ethics rules. In Fiscal Year 2003 the board opened 2271 continuing professional education complaints, none of which were solely ethics course related.

Limiting ethics instructors to only psychologists or psychiatrists would be too limiting and expensive for licensees.

Deleting "or she" is an editorial change because one gender includes both genders, not to limit instructor applicants to only males.

The comments about requiring CPE courses to be pertinent to a CPA's field of practice will be made available to the board's CPE committee for its consideration.

There does not appear to be any authoritative literature published or studies performed that point to the one most effective way for state accounting boards to have ethics taught and, given the current turbulent business ethics situation, this is one way that this board is attempting to address its licensees' ethics, and it may be that these proposed rules will again be amended as the board and its ethics instructors acquire pertinent experience.

The new course may prove to be too short, but the board wants to try to meet its objectives in a four hour course before imposing a longer duration with the concomitant hardship on Texas CPAs. The four hour duration is a starting point. The board will continue to study the effectiveness of the course.

The new rules are adopted 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 §901.411 which authorizes the board to promulgate rules regarding continuing professional education.

No other article, statute or code is affected by these adoptions.

§523.132.Board Contracted Ethics Instructors after January 1, 2005.

(a) Effective January 1, 2005, the board may contract with any instructor wishing to offer an ethics course approved by the board pursuant to §523.131 of this title (relating to Board Approval of Ethics Course Content after January 1, 2005) who can demonstrate that:

(1) the instructor is a certified public accountant licensed in Texas and has completed the board's ethics training program within the last three years or as required by the board;

(2) the instructor has never been disciplined for a violation of the board's Rules of Professional Conduct; and

(3) the instructor is qualified to teach ethical reasoning because he has:

(A) experience in the study and teaching of ethical reasoning; and

(B) formal training in organizational or ethical behavior instruction.

(b) An instructor demonstrates that he is qualified to teach ethical reasoning upon proof that he has:

(1) at the time of application or by June 30, 2005, whichever is later, obtained education in ethics substantially equivalent to a minimum of 6 hours of credit from an accredited University, College or Community College, of which at least three hours must be in organizational ethics;

(2) teaching experience that is substantially equivalent to two or more full time semesters teaching experience at an accredited University, College or Community College;

(3) spent at least ten years performing accountancy related activities as a licensed CPA;

(4) no record of discipline for violation of the rules of professional conduct of the American Institute of Certified Public Accountants, the Texas Society of Certified Public Accountants or other national or state accountancy organization recognized by the board; and

(5) goals and interests consistent with the board's purpose of protecting the public interest pursuant to the provisions of the Public Accountancy Act.

(c) The board may refuse to contract, refuse to renew a contract or cancel the contract of any instructor who has engaged in conduct rendering that instructor unsuitable for teaching ethics.

(d) Interpretive comments: To have goals and interests consistent with the board's purpose of protecting the public interest pursuant to the provisions of the Public Accountancy Act an instructor must refrain from using the instruction of an ethics course as a marketing tool for other products and services offered by the instructor. An instructor must be free from conflicts of interest with the board in both fact and appearance. Representation of a respondent or a complainant in a disciplinary proceeding pending before the board creates the appearance of a conflict of interest.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 18, 2004.

TRD-200402035

Rande Herrell

General Counsel

Texas State Board of Public Accountancy

Effective date: April 7, 2004

Proposal publication date: January 30, 2004

For further information, please call: (512) 305-7848


Subchapter D. STANDARDS FOR CONTINUING PROFESSIONAL EDUCATION PROGRAMS AND RULES FOR SPONSORS

22 TAC §§523.140 - 523.147

The Texas State Board of Public Accountancy adopts new rules §523.140 concerning Program Standards; §523.141 concerning Evaluation; §523.142 concerning Program Time Credit Measurement; §523.143 concerning Sponsor's Record; §523.144 concerning Board Contracted CPE Sponsors after December 31, 2005; §523.145 concerning Obligations of the Sponsor; §523.146 concerning Registry of National Association of State Boards of Accountancy (NASBA) CPE Sponsors and §523.147 concerning Sponsor Review Oversight Program in Chapter 523, Subchapter D without changes to the proposed text as published in the January 30, 2004, issue of the Texas Register (29 TexReg 767). The text of the rules will not be republished.

The new rules §§523.140 through 523.147 are adopted new for renumbering purposes and, because the CPE rules are being repealed and renumbered, to correct references to section numbers. New §523.101 contains a chart showing the disposition of the rules under the new numbering system. In addition, these rules will re-create and continue the board's continuing professional education program. Rule 523.140 contains standards for the program developers, course materials, participants, facilities, general course instructors, ethics instructors and sponsors. Rule 523.144 is being re-numbered, references to other rules are also being re-numbered and the caption of the rule has been changed. Rule 523.146 is being re-numbered, the rule caption is being changed, and a new subsection exempts sponsors registered under this Rule from entering into the contract required by Rule 523.144. Rules 523.141-523.143, 523.145 and 523.147 are only being re-numbered.

The new rules will function by re-creating and continuing the board's continuing professional education program. In addition, the rules will function by correcting references to section numbers and renumbering the rules.

No comments were received regarding adoption of these rules.

The new rules are adopted 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 § 901.411 which authorizes the board to promulgate rules regarding continuing professional education.

No other article, statute or code is affected by these adoptions.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 18, 2004.

TRD-200402036

Rande Herrell

General Counsel

Texas State Board of Public Accountancy

Effective date: April 7, 2004

Proposal publication date: January 30, 2004

For further information, please call: (512) 305-7848