ADOPTED RULES An agency may take final action on a section 30 days after a proposal has been published in the Texas Register. The section becomes effective 20 days after the agency files the correct document with the Texas Register, unless a later date is specified or unless a federal statute or regulation requires implementation of the action on shorter notice. If an agency adopts the section without any changes to the proposed text, only the preamble of the notice and statement of legal authority will be published. If an agency adopts the section with changes to the proposed text, the proposal will be republished with the changes. TITLE 22. EXAMINING BOARDS PART XXII. Texas State Board of Public Accountancy CHAPTER 501.Professional Conduct Other Responsibilities and Practices 22 TAC sec.501.36 The Texas State Board of Public Accountancy adopts new sec.501.36 with changes to the proposed text as published in the February 21, 1997, issue of the Texas Register (22 TexReg 1872). The changes are the additional language located in paragraph (2) adding deferred adjudication as one of the events that must be reported to the Board, the addition of the phrase "of this section" in subsection (b), the additional of "or other licensing agency" in paragraph (4), the addition of the word "or" to paragraph (3) and the deletion of "deferred adjudication" from paragraph (1)(D). The new rule allows the board to be able to investigate criminal actions or other actions taken against licensees sooner than waiting for the licensees to disclose this information on their annual license renewal. The new rule will function by requiring licensees to report to the board the occurrence of certain events sooner than waiting for their annual license renewals. No comments were received concerning adoption of the new rule. The new rule is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law; and sec.21(c)(5) which authorizes the board to take disciplinary action against any of its licensees who are convicted of criminal or other actions. sec.501.36.Reportable Events. (a) A licensee shall report in writing to the board the occurrence of any of the following events within 30 days of the date the licensee has knowledge of these events: (1) the conviction of the licensee of any of the following: (A) a felony; (B) any crime related to the qualifications, functions, or duties of a public accountant or certified public accountant, or to acts or activities in the course and scope of the practice of public accountancy; or (C) any crime involving theft, embezzlement, misappropriation of funds or property, breach of a fiduciary responsibility, or the preparation, publication, or dissemination of false, fraudulent, or materially misleading financial statements, reports, or information; or (D) as used in this section, a conviction includes the initial plea, verdict, or finding of guilt, pleas of no contest, or pronouncement of sentence by a trial court even though that conviction may not be final or sentence may not be actually imposed until all appeals are exhausted. (2) the imposition of deferred adjudication in connection with a criminal prosecution of a felony or any other crime, an element of which is dishonesty or fraud, under the laws of any state or of the United States; (3) the cancellation, revocation, or suspension of a certificate, other authority to practice or refusal to renew a certificate or other authority to practice as a certified public accountant or a public accountant, by any state, foreign country or other jurisdiction; or (4) the cancellation, revocation, or suspension of the right to practice as a certified public accountant or a public accountant before any governmental body or agency or other licensing agency. (b) The report required by subsection (a) of this section shall be signed by the licensee and shall set forth the facts which constitute the reportable event. If the reportable event involves the action of an administrative agency or court, then the report shall set forth the title of the matter, court or agency name, docket number, and dates of occurrence of the reportable event. (c) A licensee shall promptly respond to written inquiries from the board concerning the reportable events, including inquiries made by the board in conjunction with license renewal. (d) Nothing in this section imposes a duty upon any licensee to report to the board the occurrence of any of the events set forth in subsection (a) of this section either by or against any other licensee. 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. Issued in Austin, Texas, on March 27, 1997. TRD-9705062 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: May 6, 1997 Proposal publication date: February 21, 1997 For further information, please call: (512) 505-5566 22 TAC sec.501.47 The Texas State Board of Public Accountancy adopts an amendment to sec.501.47, without changes to the proposed text as published in the February 21, 1997, issue of the Texas Register (22 TexReg 1873). The amendment allows consumers to be assured that everyone whose name is in the firm name is a duly licensed Certificate Public Accountant. The amendment will function by requiring that a firm's name may consist of only duly licensed Certified Public Accountants or Public Accountants whose licenses are active and in good standing. No comments were received concerning adoption of the amended rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law. 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. Issued in Austin, Texas, on March 27, 1997. TRD-9705063 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: May 6, 1997 Proposal publication date: February 21, 1997 For further information, please call: (512) 505-5566 CHAPTER 511.Certification as CPA CPA Examination 22 TAC sec.511.74 The Texas State Board of Public Accountancy adopts an amendment to sec.511.74, without changes to the proposed text as published in the February 21, 1997, issue of the Texas Register, (22 TexReg 1874). The amendment allows the replacement of "picture" with "photograph" and deletes language pertaining to disabled examination candidates because disabled examination candidates are discussed in proposed new sec.511.91 of this title (relating to Examination Applicants Requesting Accommodations for Disabilities), 511.93 of this title (relating to Applications for Accommodations for Disabilities), 511.94 of this title (relating to Documentation of the Need for an Accommodation) and 511.95 of this title (relating to Evaluation of the Accommodation Request). The amendment will function by allowing the rules concerning disabled examination candidates to be thoroughly addressed in a complete set of rules. No comments were received concerning adoption of the amended rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law and is required by the American with Disabilities Act. 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. Issued in Austin, Texas, on March 27, 1997. TRD-9705064 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: May 6, 1997 Proposal publication date: February 21, 1997 For further information, please call: (512) 505-5566 22 TAC sec.511.91 The Texas State Board of Public Accountancy adopts new sec.511.91, without changes to the proposed text as published in the February 21, 1997, issue of the Texas Register (22 TexReg 1874). The new rule allows implementation of the Americans with Disabilities Act. The new rule will function by implementing the Americans with Disabilities Act. No comments were received concerning adoption of the new rule. The new rule is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law and is required by the Americans with Disabilities Act. 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. Issued in Austin, Texas, on March 27, 1997. TRD-9705065 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: May 6, 1997 Proposal publication date: February 21, 1997 For further information, please call: (512) 505-5566 22 TAC sec.511.93 The Texas State Board of Public Accountancy adopts new sec.511.93, without changes to the proposed text as published in the February 21, 1997, issue of the Texas Register (22 TexReg 1875). The new rule allows implementation of the Americans with Disabilities Act. The new rule will function by implementing the Americans with Disabilities Act. No comments were received concerning adoption of the new rule. The new rule is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law and is required by the Americans with Disabilities Act. 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. Issued in Austin, Texas, on March 27, 1997. TRD-9705066 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: May 6, 1997 Proposal publication date: February 21, 1997 For further information, please call: (512) 505-5566 22 TAC sec.511.94 The Texas State Board of Public Accountancy adopts new sec.511.94, without changes to the proposed text as published in the February 21, 1997, issue of the Texas Register (22 TexReg 1875). The new rule allows implementation of the Americans with Disabilities Act. The new rule will function by implementing the Americans with Disabilities Act. No comments were received concerning adoption of the new rule. The rule is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provides the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law and is required by the Americans with Disabilities Act. 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. Issued in Austin, Texas, on March 27, 1997. TRD-9705067 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: May 6, 1997 Proposal publication date: February 21, 1997 For further information, please call: (512) 505-5566 22 TAC sec.511.95 The Texas State Board of Public Accountancy adopts new sec.511.95, without changes to the proposed text as published in the February 21, 1997, issue of the Texas Register (22 TexReg 1876). The new rule allows implementation of the Americans with Disabilities Act. The new rule will function by implementing the Americans with Disabilities Act. No comments were received concerning adoption of the new rule. The new rule is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law and is required to implement the Americans with Disabilities Act. 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. Issued in Austin, Texas, on March 27, 1997. TRD-9705068 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: May 6, 1997 Proposal publication date: February 21, 1997 For further information, please call: (512) 505-5566 22 TAC sec.511.96 The Texas State Board of Public Accountancy adopts new sec.511.96 without changes to the proposed text as published in the February 21, 1997, issue of the Texas Register (22 TexReg 1877). The new rule allows implementation of the Americans with Disabilities Act. The new rule will function by implementing the Americans with Disabilities Act. No comments were received concerning adoption of the new rule. The new rule is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law and is required by the Americans with Disabilities Act. 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. Issued in Austin, Texas, on March 27, 1997. TRD-9705069 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: May 6, 1997 Proposal publication date: February 21, 1997 For further information, please call: (512) 505-5566 Application for Certification by Reciprocity from an Approved State 22 TAC sec.511.140 The Texas State Board of Public Accountancy adopts an amendment to sec.511.140, with changes to the proposed text as published in the December 6, 1996, issue of the Texas Register (21 TexReg 11711). The changes are: replacing the word "state" with the word "jurisdiction" in subsections (a), (c) and (d); the addition of paragraph (2) and of subsections (b) and (e); this necessitates the renumbering of paragraph (1) under subsection (a), the changing of the alphabetizing of subsections (b), (c), and (d), and the additional new language contained in subsection (e); "or" was added to the end of paragraph (1); "as" has been added to subsection (d) following "jurisdiction"; a semicolon replaced the period at the end of subsection (1); and the deletion of "The Board following its review of the application and determination that its process is substantially equivalent, may designate the state as an approved state" at the end of subsection (a)(1). The amendment allows for a uniform alternative route for reciprocity that is trustworthy and upon which the public may rely. The amendment will function by allowing CPAs to be licensed by reciprocity if they have obtained appropriate verification from the National Association of State Boards of Accounting (NASBA). No comments were received concerning adoption of the amended rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law; and sec.13, which authorizes the Board to license by reciprocity. sec.511.140.Application for Certification by Reciprocity. (a) The licensing authority of any jurisdiction may: (1) submit to the board on an application form approved by the board, evidence of a certification and licensing process which is substantially equivalent to the certification and licensing process of the board; or (2) obtain from the National Association of State Board of Accountancy (NASBA) verification of substantial equivalence of that jurisdiction's licensing requirements with the licensing requirements of the AICPA/NASBA Uniform Accountancy Act. (b) The board, following its review of information submitted by a statement under the conditions of subsection (a), paragraphs (1) and (2) of this section, shall designate the jurisdiction as an approved jurisdiction for reciprocity for its CPA licensees if the state meets the conditions of paragraph (1) or (2). (c) An individual holding a valid certificate and license in good standing as a certified public accountant in an approved jurisdiction may be exempted from providing the evidence required in paragraphs (1)-(4) and (6)-(8) of sec.511.141 of this title (relating to Application for Certification by Reciprocity), and subsections (a) and (b) of sec.511.142 of this title (relating to Qualifications for Certification by Reciprocity). (d) The board may designate a jurisdiction as an approved state in part, and require an application for reciprocity to provide only that information which the board determines is needed to produce a substantially equivalent certification and licensing process. (e) In the alternative to the process provided in subsections (a) through (c) of this section, an applicant who has a valid certificate to practice as a certified public accountant from any jurisdiction and who has obtained from the National Association of State Boards of Accountancy (NASBA) verification of compliance with the Uniform Accountancy Act's CPA registration requirements shall be presumed for purposes of reciprocity to have qualifications substantially equivalent to this state's qualifications. 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. Issued in Austin, Texas, on March 27, 1997. TRD-9705070 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: May 6, 1997 Proposal publication date: December 6, 1996 For further information, please call: (512) 505-5566 Certification by Reciprocity 22 TAC sec.511.143 The Texas State Board of Public Accountancy adopts an amendment to sec.511.143 without changes to the proposed text as published in the February 21, 1997, issue of the Texas Register (22 TexReg 1878). The amendment is necessary to comply with the North American Free Trade Agreement (NAFTA) and other international treaties. The amendment will function by having the evaluation of foreign credentials performed for the board by the International Qualifications Appraisal Board. No comments were received concerning adoption of the amended rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6 which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law; and Sections 13 and 14 which authorize the Board to issue certificates by reciprocity and to register certified public accountants or their equivalents from other states and foreign countries and North American Free Trade Act. 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. Issued in Austin, Texas, on March 27, 1997. TRD-9705071 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: May 6, 1997 Proposal publication date: February 21, 1997 For further information, please call: (512) 505-5566 CHAPTER 523.Continuing Professional Education Continuing Professional Education Standards 22 TAC sec.523.32 The Texas State Board of Public Accountancy adopts an amendment to sec.523.32, without changes to the proposed text as published in the February 21, 1997, issue of the Texas Register (22 TexReg 1878). The amendment allows a requirement that licensees complete a four-hour ethics course during the initial three-year period of the ethics course requirement but only a two-hour course during the subsequent three periods. The amendment will function by tailoring the initial ethics course to impart basic knowledge with an update ethics course in length appropriate to changes in the Rules of Professional Conduct. No comments were received concerning adoption of the amended rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6 which provides the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law; and sec.15A which requires licensees to complete continuing professional education. 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. Issued in Austin, Texas, on March 27, 1997. TRD-9705072 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: May 6, 1997 Proposal publication date: February 21, 1997 For further information, please call: (512) 505-5566 CHAPTER 527.Quality Review 22 TAC sec.527.5 The Texas State Board of Public Accountancy adopts an amendment to sec.527.5 without changes to the proposed text as published in the February 21, 1997, issue of the Texas Register (22 TexReg 1879). The amendment enhances the board's tracking of quality review. The amendment will function by requiring that firms which become subject to quality review inform the board within 12 months of becoming subject to quality review of their quality review enrollment information. No comments were received concerning adoption of the amended rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law; and 15B which authorizes the board to promulgate rules on quality review. 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. Issued in Austin, Texas, on March 27, 1997. TRD-9705073 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: May 6, 1997 Proposal publication date: February 21, 1997 For further information, please call: (512) 505-5566 22 TAC sec.527.6 The Texas State Board of Public Accountancy adopts an amendment to sec.527.6, without changes to the proposed text as published in the February 21, 1997, issue of the Texas Register (22 TexReg 1879). The amendment allows the board to be informed when licensees' quality reviews are not unqualified which should result in earlier and improved tracking of these firms by the board. The amendment will function by requiring that firms send copies of conditional acceptance to the board. No comments were received concerning adoption of the amended rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law; and 15B which authorizes the board to promulgate rules of quality review. 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. Issued in Austin, Texas, on March 27, 1997. TRD-9705074 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: May 6, 1997 Proposal publication date: February 21, 1997 For further information, please call: (512) 505-5566 TITLE 31. NATURAL RESOURCES AND CONSERVATION PART I. General Land Office CHAPTER 25.Beach Cleaning and Maintenance Assistance Program 31 TAC sec.sec.25.4, 25.6, 25.12, 25.13, 25.16 The Texas General Land Office adopts amendments to sec.sec.25.4, 25.6, 25.12, 25.13 and 25.16, concerning the administration of the Beach Maintenance Fund Program (BMFP). These amendments conform Chapter 25 to the Texas Natural Resources Code, sec.61.076 (relating to the limitation on the state share of the costs of cleaning and maintaining public beaches), and the Tax Code, sec.156.2511 (concerning hotel occupancy tax), as amended by House Bill (HB) 2129 passed by the 74th Legislature in 1995. These amendments are being adopted without changes to the proposed text as published in the November 19, 1996, issue of the Texas Register (21 TexReg 11282). The text will not be republished. Chapter 61, Subchapter C, Texas Natural Resources Code, allocates responsibility for cleaning the beaches of this state, provides for reimbursement of local government beach cleaning expenditures, and protects local control over the maintenance and administration of Texas' public beaches. The BMFP is a state fund administered by the Texas General Land Office for the purpose of reimbursing eligible coastal cities and counties for beach cleaning and maintenance expenses, using a formula based on past expenditures for cleaning and maintaining gulf beaches and on the total linear footage of gulf beach cleaned and maintained. The 1995 legislative changes allow eligible coastal municipalities (ECM) to receive a refund based on the amount of hotel occupancy taxes collected from hotels located in the ECM (hereafter referred to as the "tax refund"). As mandated by the Tax Code, sec.156.2511, the tax refund can only be used to clean and maintain the public beaches within that ECM. Expenditures by local governments to clean and maintain the public beach, other than the tax refund, may qualify for reimbursement by the state through participation in the BMFP. Other amendments adopted by the Texas General Land Office streamline the BMFP process by: (i) revising the time period used for calculating expenditure history to coincide with the state's fiscal year which runs from September 1 through August 31; (ii) allowing a designated local government official, rather than an independent certified public accountant, to certify BMFP reimbursement applications as true and correct; and (iii) permitting funds expended by local governments on beach nourishment projects to be considered for BMFP reimbursement. A local government's history of expenditure for beach cleaning and maintenance is used to calculate the appropriate amount of reimbursement for a current fiscal year. An 11-quarter expense history was originally adopted to provide BMFP applicants the opportunity to submit their claims for reimbursement in the quarter just prior to the expiration of the state's fiscal year; however, most applicants prefer to submit claims for BMFP reimbursement closer to or after the end of the state's fiscal year. The amendment to sec.25.4 (concerning notification of available funds) changes the time period to the two fiscal years preceding the year for which the applicant seeks reimbursement. This change will reduce paperwork and minimize state and local government expenditures of time and resources. Section 25.6 (concerning application for funds assistance) is amended by adding subsection (e) to allow a local official designated by resolution of the appropriate local governing body to certify the BMFP reimbursement application as true and correct. This change eliminates the requirement for cities or counties that do not employ a staff auditor to hire an independent auditor and reduces associated costs for local governments. Section 25.12 (concerning eligible costs) is amended by adding subsection (e) to allow expenditures by cities and counties on beach nourishment projects conducted under the Texas Natural Resources Code, Chapter 33, Subchapter H, to be included as an eligible expense for the purpose of determining the two-thirds cap on the state's share of beach cleaning and maintenance funds which is imposed by the Texas Natural Resources Code, sec.61.076(a), and sec.25.13(a) of this title. Section 25.13 (concerning the extent of state assistance) is amended by adding subsection (c) to conform the rule with HB 2129 amendments to the Tax Code, sec.156.2511, and the Texas Natural Resources Code, sec.61.076. Tax refunds received by local governments from the Comptroller's office may be used only for cleaning and maintaining the public beach, but they are not eligible for BMFP reimbursement, nor are they included in the calculation of the two-thirds cap imposed by Texas Natural Resource Code, sec.61.076(a). No part of any tax refund included in local expenditures for cleaning and maintaining the beach is included in the BMFP calculation. For example: if an ECM spends a total of $100.00, consisting of $80.00 in local expenditure and $20.00 tax refund, to clean and maintain the beach for Fiscal Year 1996, only $80.00 is considered to have been expended for purposes of BMFP reimbursement for Fiscal Year 1996. Former subsection 25.16(b) (concerning certification of expenses billed as true and correct) was deleted because such certification will now occur pursuant to sec.25.6(e). In order to accommodate the deletion of sec.25.16(b), previous sec.25.16(c) is now subsection (b); previous sec.25.16(d) is now subsection (c); and previous sec.25.16(e) is now subsection (d). The Texas General Land Office has prepared a takings impact assessment for the adoption of this amendment. The Texas General Land Office has determined that adoption of this amendment will not result in a taking of private real property. To receive a copy of this takings impact assessment, please send a written request to Ms. Cheli Cook, Texas General Land Office, Legal Services Division, 1700 North Congress Avenue, Room 626, Austin, Texas 78701-1495, facsimile number (512) 463-6311. No comments were received regarding the proposed amendments. The amendments are adopted under the Texas Natural Resources Code, sec.61.061 et seq, which provide the Texas General Land Office with the authority to allocate responsibility for cleaning the beaches of Texas and to preserve and protect local initiative in the maintenance and administration of beaches. 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. Issued in Austin, Texas, on April 14, 1997. TRD-9704993 Garry Mauro Commissioner General Land Office Effective date: May 5, 1997 Proposal publication date: November 19, 1996 For further information, please call: (512) 305-9129