1.1                          A bill for an act 
  1.2             relating to occupations and professions; board of 
  1.3             accountancy; providing for licensure of firms; 
  1.4             modifying licensing and disciplinary requirements; 
  1.5             regulating practice entities; appropriating money; 
  1.6             amending Minnesota Statutes 1994, sections 326.165; 
  1.7             326.17; 326.18; 326.19; 326.20, subdivisions 1, 3, 4, 
  1.8             and by adding a subdivision; 326.211, subdivisions 1, 
  1.9             2, 3, 4, 5, 7, 8, 9, and 10; 326.212, subdivisions 1, 
  1.10            3, 5, and by adding a subdivision; 326.22, 
  1.11            subdivisions 1, 2, and 3; 326.223; 326.224; 326.228; 
  1.12            and 326.229, subdivisions 3, 4, 6, 7, and by adding a 
  1.13            subdivision; proposing coding for new law in Minnesota 
  1.14            Statutes, chapter 326; repealing Minnesota Statutes 
  1.15            1994, section 326.191; 326.20, subdivision 2; 326.21; 
  1.16            326.212, subdivision 4; and 326.225. 
  1.17  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.18     Section 1.  Minnesota Statutes 1994, section 326.165, is 
  1.19  amended to read: 
  1.20     326.165 [BOARD OF ACCOUNTANCY POLICY; DEFINITIONS.] 
  1.21     Subdivision 1.  [PURPOSE.] It is the policy of this state 
  1.22  to promote the dependability of information which is used for 
  1.23  guidance in financial transactions or for accounting for or 
  1.24  assessing the status or performance of commercial and 
  1.25  noncommercial enterprises, whether public, private or 
  1.26  governmental.  The public interest requires that persons engaged 
  1.27  in the practice of public accounting be qualified; that a public 
  1.28  authority competent to prescribe and assess the qualifications 
  1.29  of public accountants be established; that the expression of any 
  1.30  form of assurance or of opinions on financial statements be 
  1.31  reserved to persons who demonstrate their ability and fitness to 
  2.1   observe and apply the standards of the accounting profession; 
  2.2   and that the use of accounting titles likely to confuse the 
  2.3   public be prohibited. 
  2.4      It is also in the public interest to assure that persons 
  2.5   who perform accounting work for the public, and call themselves 
  2.6   "accountants" or prepare financial statements, are professional, 
  2.7   competent, and accountable to the public for whom they provide 
  2.8   services. 
  2.9      Subd. 2.  [PRACTICE OF PUBLIC ACCOUNTING.] The "practice of 
  2.10  public accounting" is: 
  2.11     (a) holding one's self out to the public as skilled in the 
  2.12  knowledge and practice of accounting; or (b) expressing any form 
  2.13  of assurance on financial statements; or (c) expressing opinions 
  2.14  on financial statements for credit purposes, for use in courts 
  2.15  and for other purposes involving third parties. 
  2.16     (1) the expressing of any form of assurance on financial 
  2.17  statements or similar financial information; expressing opinions 
  2.18  on financial statements or similar financial information for 
  2.19  credit purposes, for use in courts, and for other purposes 
  2.20  involving third parties; or services involving the use of 
  2.21  auditing skills, by a person or firm; or 
  2.22     (2) the performance or the offering to perform for a fee, 
  2.23  for a client or potential client, of one or more kinds of 
  2.24  services involving the use of accounting skills, including:  (i) 
  2.25  the issuance of reports on or preparation of financial 
  2.26  statements or similar financial information; (ii) one or more 
  2.27  kinds of management advisory, financial advisory, or consulting 
  2.28  services; or (iii) the preparation of tax returns or the 
  2.29  furnishing of advice on tax matters by a person or entity 
  2.30  holding itself out to the public as a licensee or firm. 
  2.31     Subd. 3.  [ASSURANCE OR OPINIONS ON FINANCIAL STATEMENTS.] "
  2.32  Assurance or opinions on financial statements" are any opinions 
  2.33  expressed in accordance with generally accepted auditing 
  2.34  standards as to the fairness of presentation of information 
  2.35  which is used for guidance in financial transactions or for 
  2.36  accounting for or assessing the status or performance of 
  3.1   commercial and noncommercial enterprises, whether public, 
  3.2   private, or governmental.  
  3.3      Subd. 4.  [FIRM.] "Firm" means a CPA or LPA partnership, 
  3.4   CPA or LPA professional corporation, CPA or LPA professional 
  3.5   limited liability company (PLC), CPA or LPA professional limited 
  3.6   liability partnership (PLLP), or association engaged in the 
  3.7   practice of public accounting, including individual partners or 
  3.8   shareholders. 
  3.9      Sec. 2.  Minnesota Statutes 1994, section 326.17, is 
  3.10  amended to read: 
  3.11     326.17 [BOARD OF ACCOUNTANCY.] 
  3.12     A board of accountancy is created to carry out the purposes 
  3.13  and enforce the provisions of sections 326.165 to 326.229 
  3.14  326.236.  It consists of between seven and nine citizens of this 
  3.15  state appointed by the governor as provided in this section.  
  3.16  Two shall be public members as defined by section 214.02, five 
  3.17  shall be currently actively licensed certified public 
  3.18  accountants, and two shall be actively licensed public 
  3.19  accountants under the provisions of sections 326.165 to 326.229 
  3.20  326.236.  When the number of licensed public accountants in this 
  3.21  state drops below 100, their representation on the board of 
  3.22  accountancy shall drop to one and the board shall consist of two 
  3.23  public members, five currently actively licensed certified 
  3.24  public accountants, and one actively licensed public 
  3.25  accountant.  At the time when the number of licensed public 
  3.26  accountants in this state drops below 25, the licensed public 
  3.27  accountants shall lose their representation on the board, except 
  3.28  that the licensed public accountant then serving on the board 
  3.29  shall be allowed to complete the term of office and the board 
  3.30  shall consist of two public members and five currently actively 
  3.31  licensed certified public accountants.  Membership terms, 
  3.32  compensation of members, removal of members, the filling of 
  3.33  membership vacancies, and fiscal year and reporting requirements 
  3.34  shall be as provided in sections 214.07 to 214.09.  The 
  3.35  provision of staff, administrative services and office space; 
  3.36  the review and processing of complaints; the setting of board 
  4.1   fees; and other provisions relating to board operations shall be 
  4.2   as provided in chapter 214 and sections 326.165 to 326.229 
  4.3   326.236. 
  4.4      Sec. 3.  Minnesota Statutes 1994, section 326.18, is 
  4.5   amended to read: 
  4.6      326.18 [BOARD, DUTIES, OFFICERS, EXAMINATIONS.] 
  4.7      A majority of the qualified members of the board 
  4.8   constitutes a quorum.  The board shall elect one of its number 
  4.9   as chair, another as vice-chair, and another as secretary and 
  4.10  treasurer, who shall hold their respective offices for a term of 
  4.11  one year and until their successors are elected.  The 
  4.12  affirmative vote of a majority of members of the board is 
  4.13  considered the action of the board.  The board shall enforce the 
  4.14  standard of general education; the standard of special education 
  4.15  in the science and art of accounting; the standard of good 
  4.16  character and general public experience, as prescribed in 
  4.17  sections 326.165 to 326.229 326.236, in all examinations 
  4.18  conducted thereunder.  The board shall make rules for the 
  4.19  conduct of applicants' examinations and the character and scope 
  4.20  of the examinations, the method and time of filing applications 
  4.21  for examinations and their form and contents, and all other 
  4.22  rules proper to carry into effect the purposes of sections 
  4.23  326.165 to 326.229 326.236.  The board may make use of all or 
  4.24  any part of the uniform certified public accountant examination 
  4.25  and advisory grading service provided by the American Institute 
  4.26  of Certified Public Accountants if it deems it appropriate to 
  4.27  assist it in performing its duties.  These examinations shall be 
  4.28  conducted by the board of accountancy.  The examinations shall 
  4.29  take place as often as may be convenient in the opinion of the 
  4.30  board.  The board may make rules necessary to implement and 
  4.31  enforce sections 326.165 to 326.229 326.236, and 214.12, 
  4.32  including but not limited to rules of professional conduct, 
  4.33  pertaining to individuals, partnerships and, corporations, 
  4.34  limited liability companies, and limited liability partnerships 
  4.35  practicing public accounting which it deems consistent with or 
  4.36  required by the public welfare and rules of 
  5.1   continuing professional education and practice monitoring to be 
  5.2   met by persons licensed under sections 326.165 to 326.229 
  5.3   326.236.  
  5.4      The board shall keep records of its proceedings, an 
  5.5   accurate list of all applications made, licenses and 
  5.6   certificates issued, and licenses and certificates revoked, and 
  5.7   shall keep proper financial records in which there shall be 
  5.8   entered a complete statement of the cash receipts and 
  5.9   disbursements.  The board shall issue to each person who 
  5.10  satisfies the examination requirements of section 326.19, 
  5.11  subdivision 1, a certified public accountant certificate and 
  5.12  shall maintain a record of that issuance.  The board shall issue 
  5.13  a license as a certified public accountant to each holder of a 
  5.14  certified public accountant certificate who satisfies the 
  5.15  experience requirements for a license as a certified public 
  5.16  accountant or to a person who has been issued a certified public 
  5.17  accountant certificate under section 326.19, subdivision 3.  The 
  5.18  board shall maintain a record of the issuance.  It shall adopt 
  5.19  and provide itself with a seal with a band inscribed "Certified 
  5.20  Public Accountant, State of Minnesota," with the coat of arms of 
  5.21  Minnesota in the center, which seal shall be affixed to each 
  5.22  certificate of certified public accountant issued under sections 
  5.23  326.17 to 326.229 326.236.  The board shall issue to each person 
  5.24  who qualifies for a license under sections 326.17 to 326.229 
  5.25  326.236 as a licensed public accountant a certificate as a 
  5.26  licensed public accountant and shall maintain a record of that 
  5.27  issuance.  It shall adopt and provide itself with a seal with a 
  5.28  band inscribed "Licensed Public Accountant, State of Minnesota," 
  5.29  with the coat of arms of Minnesota in the center, which seal 
  5.30  shall be affixed to each certificate of the licensed public 
  5.31  accountant, issued under sections 326.17 to 326.229 326.236.  
  5.32  All records of the board shall be open to the inspection of the 
  5.33  public at the its office of its secretary in accordance with 
  5.34  chapter 13. 
  5.35     Sec. 4.  Minnesota Statutes 1994, section 326.19, is 
  5.36  amended to read: 
  6.1      326.19 [LICENSURE; QUALIFICATIONS OF ACCOUNTANTS CERTIFIED 
  6.2   PUBLIC ACCOUNTANTS; CERTIFICATES AND LICENSING.] 
  6.3      Subdivision 1.  [CERTIFICATES AND LICENSES AS CERTIFIED 
  6.4   PUBLIC ACCOUNTANTS.] A certified public accountant certificate 
  6.5   shall be granted to any person: 
  6.6      (a) Who has attained the age of 18 years; and 
  6.7      (b) Who is of good character; and 
  6.8      (c) Who has successfully completed an examination in the 
  6.9   subjects and at the times the board may prescribe in its rules.  
  6.10  The examination shall be administered by the board only to a 
  6.11  candidate who holds:  
  6.12     (i) a master's degree with a major in accounting from a 
  6.13  college or university that is fully accredited by the North 
  6.14  Central Association of Colleges and Secondary Schools, or an 
  6.15  equivalent accrediting association, or who has in the opinion of 
  6.16  the board at least an equivalent education; or 
  6.17     (ii) a baccalaureate degree, with a major in accounting, 
  6.18  from a college or university that is fully accredited by the 
  6.19  North Central Association of Colleges and Secondary Schools, or 
  6.20  an equivalent accrediting association, or whose credits are 
  6.21  acceptable to the University of Minnesota for admission to 
  6.22  graduate study, a recognized accrediting agency listed with the 
  6.23  United States Department of Education or who has in the opinion 
  6.24  of the board at least an equivalent education; or 
  6.25     (iii) a baccalaureate degree from a college or university 
  6.26  that is fully accredited by the North Central Association of 
  6.27  Colleges and Secondary Schools, or an equivalent accrediting 
  6.28  association, or whose credits are acceptable to the University 
  6.29  of Minnesota for admission to graduate study, a recognized 
  6.30  accrediting agency listed with the United States Department of 
  6.31  Education or who has in the opinion of the board at least an 
  6.32  equivalent education, providing at least one year of experience 
  6.33  of the type specified in subdivision 4, has been completed; or 
  6.34     (iv) evidence of having completed two or more years of 
  6.35  study with passing grade average or above from: 
  6.36     (A) a college or university that is fully accredited by the 
  7.1   North Central Association of Colleges and Secondary Schools, or 
  7.2   an equivalent accrediting association, or whose credits are 
  7.3   acceptable to the University of Minnesota for admission to 
  7.4   graduate study, or a technical college, or a Minnesota licensed 
  7.5   private vocational school which fulfills the requirements of 
  7.6   sections 141.21 to 141.36, that is fully accredited by a 
  7.7   recognized accrediting agency listed with the United States 
  7.8   Department of Education; or 
  7.9      (B) who has in the opinion of the board at least an 
  7.10  equivalent education, providing at least three years experience 
  7.11  of the type specified in subdivision 4, has been completed; or 
  7.12     (v) a diploma as a graduate of an accredited high school or 
  7.13  who has in the opinion of the board at least an equivalent 
  7.14  education, providing at least five years experience of the type 
  7.15  specified in subdivision 4 has been completed.  
  7.16     Subd. 2.  [EXPERIENCE.] A certified public accountant 
  7.17  license shall be granted to any person who has been issued a 
  7.18  certified public accountant certificate under subdivision 3.  
  7.19  Those persons holding certified public accountant certificates 
  7.20  issued under subdivision 1 shall be granted licenses as 
  7.21  certified public accountants providing that they have completed 
  7.22  the following required experience of the type specified in 
  7.23  subdivision 4 in addition to any experience required in 
  7.24  subdivision 1, clause (c)(i) to (v): 
  7.25     (i) for those whose educational qualifications meet the 
  7.26  requirements of subdivision 1, clause (c)(i) the experience 
  7.27  requirement is one year; 
  7.28     (ii) for those whose educational qualifications meet the 
  7.29  requirements of subdivision 1, clause (c)(ii) the experience 
  7.30  requirement is two years; 
  7.31     (iii) for those whose educational and experience 
  7.32  qualifications meet the requirements of subdivision 1, clause 
  7.33  (c)(iii), the additional required experience is two years; 
  7.34     (iv) for those whose educational and experience 
  7.35  qualifications meet the requirements of subdivision 1, clause 
  7.36  (c)(iv), the additional required experience is two years; and 
  8.1      (v) for those whose educational and experience 
  8.2   qualifications meet the requirements of subdivision 1, clause 
  8.3   (c)(v), the additional required experience is one year.  
  8.4      Subd. 3.  [CERTIFICATE AND LICENSE WITHOUT EXAMINATION.] 
  8.5   The state board of accountancy may, in its discretion, waive the 
  8.6   examination of and may issue a certificate and license as a 
  8.7   certified public accountant to any person possessing the 
  8.8   qualifications mentioned in this section, who: 
  8.9      (a) Is the holder of a C.P.A. license or certificate, 
  8.10  issued under the laws of another state, provided the 
  8.11  requirements for the license or certificate in the state which 
  8.12  has granted it to the applicant are, in the opinion of the state 
  8.13  board of accountancy, equivalent to those herein provided; or 
  8.14     (b) Shall be the holder of a degree or certificate of 
  8.15  certified public accountant or chartered accountant, or the 
  8.16  equivalent thereof, issued in any foreign country, provided that 
  8.17  the requirements for the degree or certificate are equivalent to 
  8.18  those herein provided for the license of certified public 
  8.19  accountant in this state. 
  8.20     (c) Shall in another jurisdiction have completed 
  8.21  successfully an examination which, in the opinion of the board, 
  8.22  is comparable to that prescribed by the board in its rules and 
  8.23  provided that such person has satisfied the other requirements 
  8.24  of subdivisions 1 and 2. 
  8.25     Subd. 4.  [QUALIFYING EXPERIENCE FOR EXAMINATION AND 
  8.26  GRANTING OF LICENSE.] Qualifying experience for subdivisions 1, 
  8.27  2, and 3 include public accounting experience: 
  8.28     (1) as a staff employee of a certified public 
  8.29  accountant or, licensed public accountant, or a firm of 
  8.30  certified public accountants or public accountants, or a 
  8.31  corporation formed for the practice of public accounting; or 
  8.32     (2) as an auditor in the office of the legislative auditor 
  8.33  or state auditor, or as an auditor or examiner with any other 
  8.34  agency of government, which experience, in the opinion of the 
  8.35  board is equally comprehensive and diversified; or 
  8.36     (3) as a self-employed public accountant or as a partner in 
  9.1   a firm of public accountants; or 
  9.2      (4) in any combination of the foregoing capacities. 
  9.3      Sec. 5.  [326.192] [LICENSURE; QUALIFICATIONS OF FIRMS.] 
  9.4      Subdivision 1.  [APPLICATION.] Upon application made upon 
  9.5   the affidavit of a general partner of the partnership, secretary 
  9.6   of the corporation, or member of the limited liability company 
  9.7   or partnership who is a certified public accountant or a 
  9.8   licensed public accountant of this state in good standing, the 
  9.9   board shall issue a firm license.  The license shall be valid 
  9.10  for a period prescribed by the board, unless the license is 
  9.11  suspended or revoked sooner.  The application shall confer upon 
  9.12  the board the consent of the partnership, corporation, or 
  9.13  limited liability company or partnership, and of the general 
  9.14  partner, secretary, or member making the application, to the 
  9.15  board's jurisdiction over the acts of the partnership and its 
  9.16  partners or agents, of the corporation and its shareholders or 
  9.17  agents within the state, or of the limited liability company or 
  9.18  partnership and its members or agents. 
  9.19     Subd. 2.  [CPA FIRMS.] No partnership, corporation, or 
  9.20  limited liability company or partnership shall style itself as a 
  9.21  firm of certified public accountants unless: 
  9.22     (1) all partners, shareholders, or members resident in this 
  9.23  state are certified public accountants of this state; 
  9.24     (2) all managers in charge of offices maintained in this 
  9.25  state are certified public accountants of this state; 
  9.26     (3) all partners, shareholders, or members, wherever 
  9.27  situated, are certified public accountants of one of the states 
  9.28  or territories or of the District of Columbia; and 
  9.29     (4) the partnership, corporation, or limited liability 
  9.30  company or partnership is duly licensed under this section. 
  9.31     Subd. 3.  [LPA FIRMS.] No partnership, corporation, or 
  9.32  limited liability company or partnership shall style itself as a 
  9.33  firm of licensed public accountants unless: 
  9.34     (1) all partners, shareholders, or members resident in this 
  9.35  state are licensed public accountants or certified public 
  9.36  accountants of this state; 
 10.1      (2) all managers in charge of offices maintained in this 
 10.2   state are licensed public accountants or certified public 
 10.3   accountants of this state; 
 10.4      (3) all partners, shareholders, or members, wherever 
 10.5   situated, are licensed public accountants of this state or 
 10.6   certified public accountants of one of the states or territories 
 10.7   or the District of Columbia; and 
 10.8      (4) the partnership, corporation, or limited liability 
 10.9   company or partnership is duly licensed under this section. 
 10.10     Subd. 4.  [EXEMPTION.] A corporation or other entity that 
 10.11  is not a firm as described in this section and section 326.165, 
 10.12  subdivision 4, and whose employees are engaged in activities 
 10.13  described in section 326.165, subdivision 2, clause (2), is not 
 10.14  required to obtain a license. 
 10.15     Subd. 5.  [PROHIBITION.] Licensees who are employees, 
 10.16  shareholders, partners, or members of a corporation or other 
 10.17  entity that is not a firm as described in this section and 
 10.18  section 326.165, subdivision 4, shall not engage in activities 
 10.19  described in section 326.165, subdivision 2, clause (1), as 
 10.20  employees or owners of such entity. 
 10.21     Subd. 6.  [COOPERATIVE AUDITING ORGANIZATION.] Any 
 10.22  cooperative auditing organization organized under chapter 308A 
 10.23  is qualified for a cooperative auditing service license and may 
 10.24  style itself as a licensed cooperative auditing service if: 
 10.25     (1) for a minimum of one year prior to July 1, 1979, it has 
 10.26  been rendering auditing or accounting of business analysis 
 10.27  services to its members only; and 
 10.28     (2) its managers in charge of offices maintained in this 
 10.29  state are certified public accountants or licensed public 
 10.30  accountants of this state. 
 10.31     Sec. 6.  Minnesota Statutes 1994, section 326.20, 
 10.32  subdivision 1, is amended to read: 
 10.33     Subdivision 1.  [LICENSE RENEWAL OF CERTIFIED PUBLIC 
 10.34  ACCOUNTANTS AND LICENSED PUBLIC ACCOUNTANTS.] Every holder of a 
 10.35  certified public accountant license or a licensed public 
 10.36  accountant license issued by the board, if engaged, or intending 
 11.1   to be engaged, in public the practice of public accounting 
 11.2   within this state at any time during a calendar year shall renew 
 11.3   the license as active as prescribed by the board by rule. 
 11.4      Every holder of a certified public accountant license or a 
 11.5   licensed public accountant license issued by the board, who does 
 11.6   not intend to actively engage in the practice of public 
 11.7   accounting within this state at any time during a calendar year, 
 11.8   shall renew the license as active or inactive, as prescribed by 
 11.9   the board by rule. 
 11.10     The board may establish governmental and temporary licenses 
 11.11  and adopt rules governing their issuance and use. 
 11.12     The board shall, upon application made by any holder of an 
 11.13  unrevoked Minnesota license as a certified public accountant or 
 11.14  license as a licensed public accountant, renew the license which 
 11.15  shall be good for a period prescribed by the board, unless the 
 11.16  said certificate or license shall sooner be revoked.  Interim 
 11.17  licenses shall be issued to individuals who have satisfied the 
 11.18  provisions of sections 326.17 to 326.229 326.236 within the year.
 11.19     Sec. 7.  Minnesota Statutes 1994, section 326.20, 
 11.20  subdivision 3, is amended to read: 
 11.21     Subd. 3.  [UNLICENSED PRACTICE.] It shall be unlawful for 
 11.22  any certified public accountant or any, licensed public 
 11.23  accountant, corporation, partnership, or limited liability 
 11.24  company or partnership containing one or more certified public 
 11.25  accountants or licensed public accountants to engage in public 
 11.26  the practice of public accounting within this state unless such 
 11.27  certified public accountant or licensed public accountant, 
 11.28  corporation, partnership, or limited liability company or 
 11.29  partnership is duly licensed to the extent required by sections 
 11.30  326.165 to 326.236 as provided by this section.  A partnership 
 11.31  shall be deemed in public practice within this state if it 
 11.32  performs professional accounting services for a fee.  A 
 11.33  certified public accountant shall be deemed in public practice 
 11.34  within this state if the accountant performs professional 
 11.35  accounting services for a fee within this state. 
 11.36     Sec. 8.  Minnesota Statutes 1994, section 326.20, 
 12.1   subdivision 4, is amended to read: 
 12.2      Subd. 4.  [TAX CLEARANCE CERTIFICATE.] (a) Notwithstanding 
 12.3   subdivisions 1 and 2, the board may shall not issue or renew a 
 12.4   license under sections 326.165 to 326.229 326.236 if the 
 12.5   commissioner of revenue notifies the board and the licensee or 
 12.6   applicant for a license that the licensee or applicant owes the 
 12.7   state delinquent taxes in the amount of $500 or more.  The board 
 12.8   may issue or renew the license only if (1) the commissioner of 
 12.9   revenue issues a tax clearance certificate and (2) the 
 12.10  commissioner of revenue or the licensee or applicant forwards a 
 12.11  copy of the clearance to the board.  The commissioner of revenue 
 12.12  may issue a clearance certificate only if the licensee or 
 12.13  applicant does not owe the state any uncontested delinquent 
 12.14  taxes. 
 12.15     (b) For purposes of this subdivision, the following terms 
 12.16  have the meanings given. 
 12.17     (1) "Taxes" are all taxes payable to the commissioner of 
 12.18  revenue, including penalties and interest due on those taxes. 
 12.19     (2) "Delinquent taxes" do not include a tax liability if 
 12.20  (i) an administrative or court action that contests the amount 
 12.21  or validity of the liability has been filed or served, (ii) the 
 12.22  appeal period to contest the tax liability has not expired, or 
 12.23  (iii) the licensee or applicant has entered into a payment 
 12.24  agreement to pay the liability and is current with the payments. 
 12.25     (c) When a licensee or applicant is required to obtain a 
 12.26  clearance certificate under this subdivision, a contested case 
 12.27  hearing must be held if the licensee or applicant requests a 
 12.28  hearing in writing to the commissioner of revenue within 30 days 
 12.29  of the date of the notice provided in paragraph (a).  The 
 12.30  hearing must be held within 45 days of the date the commissioner 
 12.31  of revenue refers the case to the office of administrative 
 12.32  hearings.  Notwithstanding any law to the contrary, the licensee 
 12.33  or applicant must be served with 20 days' notice in writing 
 12.34  specifying the time and place of the hearing and the allegations 
 12.35  against the licensee or applicant.  The notice may be served 
 12.36  personally or by mail. 
 13.1      (d) The board shall require all licensees or applicants to 
 13.2   provide their social security number and Minnesota business 
 13.3   identification number on all license applications.  Upon request 
 13.4   of the commissioner of revenue, the board must provide to the 
 13.5   commissioner of revenue a list of all licensees and applicants, 
 13.6   including the name and address, social security number, and 
 13.7   business identification number.  The commissioner of revenue may 
 13.8   request a list of the licensees and applicants no more than once 
 13.9   each calendar year.  
 13.10     Sec. 9.  Minnesota Statutes 1994, section 326.20, is 
 13.11  amended by adding a subdivision to read: 
 13.12     Subd. 5.  [EXPIRATION OF CERTIFICATE.] The certificate of 
 13.13  any licensee failing to renew a license for three or more years 
 13.14  after its expiration shall expire at the end of the three-year 
 13.15  period.  A licensee whose certificate has expired shall be 
 13.16  required to take, or retake, and pass all parts of the 
 13.17  examination required by section 326.19, subdivision 1, before 
 13.18  being issued a new certificate and license.  The board may grant 
 13.19  an exemption to taking the examination in extraordinary 
 13.20  circumstances.  
 13.21     Sec. 10.  Minnesota Statutes 1994, section 326.211, 
 13.22  subdivision 1, is amended to read: 
 13.23     Subdivision 1.  [CERTIFIED PUBLIC ACCOUNTANT; USE OF TITLE 
 13.24  BY INDIVIDUAL.] Except as permitted by the board, no person 
 13.25  shall assume or use the title or designation "certified public 
 13.26  accountant," or the abbreviation "C.P.A." or any other title, 
 13.27  designation, words, letters, abbreviation, sign, card, or device 
 13.28  tending to indicate or imply that the person is a certified 
 13.29  public accountant, unless the person has received a certificate 
 13.30  as a certified public accountant under sections 326.17 to 
 13.31  326.229 326.236, holds a license issued under sections 326.17 to 
 13.32  326.229 326.236 which is not revoked or suspended, and has all 
 13.33  offices in this state for the practice of public accounting 
 13.34  maintained and licensed as required under section 326.20 to the 
 13.35  extent required by sections 326.165 to 326.236.  
 13.36     Sec. 11.  Minnesota Statutes 1994, section 326.211, 
 14.1   subdivision 2, is amended to read: 
 14.2      Subd. 2.  [CERTIFIED PUBLIC ACCOUNTANT; USE OF TITLE BY 
 14.3   INDIVIDUAL ENTITY.] No partnership or, corporation, or limited 
 14.4   liability company or partnership shall assume or use the title 
 14.5   or designation "certified public accountant," or the 
 14.6   abbreviation "C.P.A.," or any other title, designation, words, 
 14.7   letters, abbreviation, sign, card, or device tending to indicate 
 14.8   or imply that the partnership or, corporation, or limited 
 14.9   liability company or partnership is composed of certified public 
 14.10  accountants, unless the partnership or, corporation, or limited 
 14.11  liability company or partnership is licensed as a 
 14.12  partnership or, corporation, or limited liability company or 
 14.13  partnership of certified public accountants under section 326.20 
 14.14  and all offices of the partnership or, corporation, or limited 
 14.15  liability company or partnership in this state for the practice 
 14.16  of public accounting are maintained and licensed as required 
 14.17  under section 326.20.  
 14.18     Sec. 12.  Minnesota Statutes 1994, section 326.211, 
 14.19  subdivision 3, is amended to read: 
 14.20     Subd. 3.  [LICENSED PUBLIC ACCOUNTANT; USE OF TITLE BY 
 14.21  INDIVIDUAL.] No person shall assume or use the title or 
 14.22  designation "licensed public accountant" or any other title, 
 14.23  designation, words, letters, abbreviation, sign, card, or device 
 14.24  tending to indicate or imply that the person is a licensed 
 14.25  public accountant, unless the person is licensed as a licensed 
 14.26  public accountant under section 326.191 326.19, and all of the 
 14.27  person's offices in this state for the practice of public 
 14.28  accounting are maintained and licensed as required under section 
 14.29  326.20, or unless the person has received a certificate as a 
 14.30  certified public accountant under section 326.19, holds a 
 14.31  license issued under section 326.20, and all of the person's 
 14.32  offices in this state for the practice of public accounting are 
 14.33  maintained and licensed as required under section 326.20. 
 14.34     Sec. 13.  Minnesota Statutes 1994, section 326.211, 
 14.35  subdivision 4, is amended to read: 
 14.36     Subd. 4.  [LICENSED PUBLIC ACCOUNTANT; USE OF TITLE BY 
 15.1   PARTNERSHIP OR CORPORATION ENTITY.] No partnership or, 
 15.2   corporation, or limited liability company or partnership shall 
 15.3   assume or use the title or designation "licensed public 
 15.4   accountant" or any other title, designation, words, letters, 
 15.5   abbreviation, sign, card, or device tending to indicate or imply 
 15.6   that the partnership or, corporation, or limited liability 
 15.7   company or partnership is composed of licensed public 
 15.8   accountants, unless the partnership or, corporation, or limited 
 15.9   liability company or partnership is licensed as a partnership, 
 15.10  corporation, or limited liability company or partnership of 
 15.11  licensed public accountants under section 326.20, and all 
 15.12  offices of the partnership or, corporation, or limited liability 
 15.13  company or partnership in this state for the practice of public 
 15.14  accounting are maintained and licensed as required under section 
 15.15  326.20.  
 15.16     Sec. 14.  Minnesota Statutes 1994, section 326.211, 
 15.17  subdivision 5, is amended to read: 
 15.18     Subd. 5.  [PROHIBITED AND PERMITTED TITLES.] No person, 
 15.19  partnership, or corporation, or limited liability company or 
 15.20  partnership shall assume or use the title or designation 
 15.21  "certified accountant," "chartered accountant," "enrolled 
 15.22  accountant," "licensed accountant," "public accountant," 
 15.23  "accredited accountant," "registered accountant," "accounting 
 15.24  practitioner," or any other title or designation likely to be 
 15.25  confused with "certified public accountant," or "licensed public 
 15.26  accountant," or any of the abbreviations "C.A.," "L.A.," "P.A.," 
 15.27  "R.A.," "A.A.," "A.P.," or similar abbreviations likely to be 
 15.28  confused with "C.P.A." or "L.P.A." Anyone who holds a current 
 15.29  license issued under sections 326.18 and 326.20 and all of whose 
 15.30  offices in this state for the practice of public accounting are 
 15.31  maintained and licensed as required under section 326.20 may 
 15.32  hold out to the public as an "auditor." 
 15.33     Sec. 15.  Minnesota Statutes 1994, section 326.211, 
 15.34  subdivision 7, is amended to read: 
 15.35     Subd. 7.  [FINANCIAL STATEMENT BY PARTNERSHIP OR, 
 15.36  CORPORATION, OR LIMITED LIABILITY COMPANY OR PARTNERSHIP.] No 
 16.1   person shall sign or affix a partnership or, corporate, or 
 16.2   limited liability company or partnership name to any opinion or 
 16.3   certificate attesting in any way to the reliability of any 
 16.4   representation or estimate in regard to any person or 
 16.5   organization embracing (a) financial information or (b) facts 
 16.6   respecting compliance with conditions established by law or 
 16.7   contract, including, but not limited to, statutes, ordinances, 
 16.8   rules, grants, loans, and appropriations, together with any 
 16.9   wording accompanying or contained in the opinion or certificate 
 16.10  which indicates that the partnership or, corporation, or limited 
 16.11  liability company or partnership is composed of or employs (1) 
 16.12  accountants or auditors or (2) persons having expert knowledge 
 16.13  in accounting or auditing, unless the partnership or, 
 16.14  corporation, or limited liability company or partnership is 
 16.15  licensed under sections 326.17 to 326.229 326.236.  
 16.16     Sec. 16.  Minnesota Statutes 1994, section 326.211, 
 16.17  subdivision 8, is amended to read: 
 16.18     Subd. 8.  [AUDITOR; USE OF TITLE.] No person, partnership 
 16.19  or, corporation, or limited liability company or partnership not 
 16.20  licensed under section 326.18 shall assume or use the title 
 16.21  "auditor" on any sign, card, letterhead, or in any advertisement 
 16.22  or directory without indicating thereon or therein that the 
 16.23  person, partnership or, corporation, or limited liability 
 16.24  company or partnership does not hold such a license, provided 
 16.25  that this subdivision shall not prohibit any officer, employee, 
 16.26  partner, or principal of any organization from being described 
 16.27  by the position, title, or office that person holds in the 
 16.28  organization, nor shall this subdivision prohibit any act of a 
 16.29  public official or public employee in the performance of duties. 
 16.30     Sec. 17.  Minnesota Statutes 1994, section 326.211, 
 16.31  subdivision 9, is amended to read: 
 16.32     Subd. 9.  [TITLE INDICATING PARTNERSHIP OR, CORPORATION, OR 
 16.33  LIMITED LIABILITY COMPANY OR PARTNERSHIP.] (a) No person shall 
 16.34  assume or use the title or designation "certified public 
 16.35  accountant" or "licensed public accountant" in conjunction with 
 16.36  names indicating or implying that there is a partnership or, 
 17.1   corporation, or limited liability company or partnership, if 
 17.2   there is no bona fide partnership or, corporation, or limited 
 17.3   liability company or partnership licensed under section 326.20 
 17.4   or a recognized practice entity under section 326.236. 
 17.5      (b) No person shall assume or use the title or designation 
 17.6   "certified public accountant" or "licensed public accountant" in 
 17.7   conjunction with the designation "and Company," "and Co.," "and 
 17.8   Associates," "Company," "Co.," or a similar designation if, in 
 17.9   any such case, there is in fact no bona fide partnership or, 
 17.10  corporation, or limited liability company or partnership with 
 17.11  more than one partner, shareholder, or member licensed under 
 17.12  section 326.20.  
 17.13     (c) A sole proprietor, partnership, or corporation lawfully 
 17.14  using the title or designation in conjunction with the names or 
 17.15  designation on July 1, 1992, may continue to do so if otherwise 
 17.16  in compliance with the provisions of sections 326.165 to 326.229 
 17.17  326.236 until June 30, 1997.  
 17.18     Sec. 18.  Minnesota Statutes 1994, section 326.211, 
 17.19  subdivision 10, is amended to read: 
 17.20     Subd. 10.  [UNLICENSED CORPORATION; PROHIBITED USE OF 
 17.21  TITLE.] No partnership, corporation, or limited liability 
 17.22  company or partnership other than one licensed under sections 
 17.23  326.17 to 326.229 326.236, and in compliance with the rules of 
 17.24  the board, shall style itself as certified public accountants or 
 17.25  licensed public accountants, or use the abbreviation "C.P.A." or 
 17.26  "L.P.A." in connection with its corporate name.  
 17.27     Sec. 19.  Minnesota Statutes 1994, section 326.212, 
 17.28  subdivision 1, is amended to read: 
 17.29     Subdivision 1.  [EMPLOYEES; ASSISTANTS.] Nothing contained 
 17.30  in sections 326.17 to 326.229 326.236 shall prohibit any person 
 17.31  not a certified public accountant or licensed public accountant 
 17.32  from serving as an employee of, or an assistant to, a certified 
 17.33  public accountant or licensed public accountant, or partnership 
 17.34  or, corporation, or limited liability company or partnership 
 17.35  composed of certified public accountants or licensed public 
 17.36  accountants, provided that the person shall not issue any 
 18.1   accounting or financial statement over the person's name. 
 18.2      Sec. 20.  Minnesota Statutes 1994, section 326.212, 
 18.3   subdivision 3, is amended to read: 
 18.4      Subd. 3.  [CORPORATIONS PERFORMING UNAUDITED ACCOUNTING 
 18.5   SERVICES.] Nothing contained in sections 326.165 to 326.229 
 18.6   326.236 shall prohibit any corporation from performing 
 18.7   accounting services incident to a commercial relationship with 
 18.8   another corporation, cooperative association, or cooperative 
 18.9   corporation involving either the extension of credit or the 
 18.10  performance of sales, purchasing, or marketing functions if any 
 18.11  financial reports prepared incident thereto are marked 
 18.12  "Unaudited" and disclose the identity of the preparer and its 
 18.13  lack of independence.  
 18.14     Sec. 21.  Minnesota Statutes 1994, section 326.212, 
 18.15  subdivision 5, is amended to read: 
 18.16     Subd. 5.  [TAX RETURNS.] Nothing contained in sections 
 18.17  326.165 to 326.229 326.236 shall prohibit any person, 
 18.18  partnership or, corporation, or limited liability company or 
 18.19  partnership not holding a certificate or not licensed under 
 18.20  sections 326.165 to 326.229 326.236, from preparing tax returns. 
 18.21     Sec. 22.  Minnesota Statutes 1994, section 326.212, is 
 18.22  amended by adding a subdivision to read: 
 18.23     Subd. 6.  [MAINTAIN OR SURRENDER LICENSE.] Once licensed, a 
 18.24  certified public accountant or licensed public accountant, in 
 18.25  order to perform any of the services listed in section 326.165, 
 18.26  subdivision 2, shall: 
 18.27     (1) maintain an active license; or 
 18.28     (2) surrender the certificate and license as a certified 
 18.29  public accountant or licensed public accountant. 
 18.30     Sec. 23.  Minnesota Statutes 1994, section 326.22, 
 18.31  subdivision 1, is amended to read: 
 18.32     Subdivision 1.  [EXAMINATION AND LICENSE RENEWAL.] The 
 18.33  state board of accountancy shall charge for each examination and 
 18.34  certificate provided for in sections 326.17 to 326.229 326.236 a 
 18.35  fee to be prescribed in the rules of the board, to meet the 
 18.36  expenses of such examination.  This fee shall be payable by the 
 19.1   applicant at the time of making initial application, and no 
 19.2   additional charge shall be made for the issuance of a 
 19.3   certificate to any applicant. 
 19.4      Sec. 24.  Minnesota Statutes 1994, section 326.22, 
 19.5   subdivision 2, is amended to read: 
 19.6      Subd. 2.  [ANNUAL LICENSE FEE.] Each person or, 
 19.7   partnership, corporation, or limited liability company or 
 19.8   partnership to whom a license is issued shall pay a renewal fee 
 19.9   at the rate set by the board for such year. 
 19.10     Sec. 25.  Minnesota Statutes 1994, section 326.22, 
 19.11  subdivision 3, is amended to read: 
 19.12     Subd. 3.  [EXPENSES OF ADMINISTRATION.] The expenses of 
 19.13  administering sections 326.17 to 326.229 326.236 shall be paid 
 19.14  from appropriations made to the state board of accountancy. 
 19.15     Sec. 26.  Minnesota Statutes 1994, section 326.223, is 
 19.16  amended to read: 
 19.17     326.223 [EQUIVALENCY.] 
 19.18     Whenever any statute or rule, city charter, ordinance, or 
 19.19  other similar statute or rule of any other political subdivision 
 19.20  of the state of Minnesota specifically requires professional 
 19.21  services to be performed by a certified public accountant, the 
 19.22  requirement shall be construed to mean certified public 
 19.23  accountant or licensed public accountant.  
 19.24     Sec. 27.  Minnesota Statutes 1994, section 326.224, is 
 19.25  amended to read: 
 19.26     326.224 [SINGLE ACT EVIDENCE OF PRACTICE.] 
 19.27     Displaying or presenting a card, sign, advertisement, or 
 19.28  other printed, engraved, or written instrument or device bearing 
 19.29  a person's name in conjunction with the words "certified public 
 19.30  accountant" or any abbreviation thereof, or "licensed public 
 19.31  accountant" or any abbreviation thereof, except as permitted by 
 19.32  sections 326.165 to 326.229 326.236, and Minnesota Rules, 
 19.33  chapter 1100, shall be prima facie evidence in any action 
 19.34  brought under sections 326.165 to 326.229 326.236 that the 
 19.35  person whose name is so displayed caused or procured the 
 19.36  displaying or presenting of the card, sign, advertisement, or 
 20.1   other printed, engraved, or written instrument or device, and 
 20.2   that the person is holding out to be a certified public 
 20.3   accountant or a licensed public accountant.  In any action 
 20.4   evidence of the commission of a single act prohibited by 
 20.5   sections 326.165 to 326.229 326.236 shall be sufficient to 
 20.6   justify an injunction or a conviction without evidence of a 
 20.7   general course of conduct. 
 20.8      Sec. 28.  Minnesota Statutes 1994, section 326.228, is 
 20.9   amended to read: 
 20.10     326.228 [COMPLAINT COMMITTEE.] 
 20.11     The board shall establish a complaint committee to 
 20.12  investigate, mediate, or initiate administrative or legal 
 20.13  proceedings on behalf of the board with respect to complaints 
 20.14  filed with or information received by the board alleging or 
 20.15  indicating violations of sections 326.165 to 326.229 326.236.  
 20.16  The complaint committee shall consist of three members of the 
 20.17  board, one of whom shall be a certified public accountant, and 
 20.18  one of whom shall be a licensed public accountant.  When the 
 20.19  licensed public accountants lose their representation on the 
 20.20  board pursuant to section 326.17, the complaint committee shall 
 20.21  consist of three members of the board, two of whom shall be 
 20.22  certified public accountants. 
 20.23     Sec. 29.  Minnesota Statutes 1994, section 326.229, 
 20.24  subdivision 3, is amended to read: 
 20.25     Subd. 3.  [CEASE AND DESIST ORDERS.] (a) The board, or the 
 20.26  complaint committee if authorized by the board, may issue and 
 20.27  have served upon applicants, licensees, an unlicensed person, or 
 20.28  an unlicensed certificate holder an order requiring 
 20.29  the applicant, licensee, unlicensed person, or unlicensed 
 20.30  certificate holder to cease and desist from the act or practice 
 20.31  constituting a violation of the statute, rule, or order.  The 
 20.32  order shall be calculated to give reasonable notice of the 
 20.33  rights of the applicant, licensee, unlicensed person, or 
 20.34  unlicensed certificate holder to request a hearing and shall 
 20.35  state the reasons for the entry of the order.  No such order 
 20.36  shall be issued until an investigation of the facts has been 
 21.1   conducted pursuant to section 214.10. 
 21.2      (b) Service of the order is effective when the order is 
 21.3   served on the applicant, licensee, unlicensed person, unlicensed 
 21.4   certificate holder, or counsel of record personally or by 
 21.5   certified mail to the most recent address provided to the board 
 21.6   for the applicant, licensee, unlicensed person, unlicensed 
 21.7   certificate holder, or counsel of record.  
 21.8      (c) Unless otherwise agreed by the board, or the complaint 
 21.9   committee if authorized by the board, and the person requesting 
 21.10  the hearing, the hearing shall be held no later than 30 days 
 21.11  after the request for the hearing is received by the board.  
 21.12     (d) The administrative law judge shall issue a report 
 21.13  within 30 days of the close of the contested case hearing 
 21.14  record, notwithstanding Minnesota Rules, part 1400.8100, subpart 
 21.15  3.  Within 30 days after receiving the report and any exceptions 
 21.16  to it, the board shall issue a further order vacating, 
 21.17  modifying, or making permanent the cease and desist orders as 
 21.18  the facts require.  
 21.19     (e) If no hearing is requested within 30 days of service of 
 21.20  the order, the order becomes final and remains in effect until 
 21.21  it is modified or vacated by the board. 
 21.22     (f) If the person to whom a cease and desist order is 
 21.23  issued fails to appear at the hearing after being duly notified, 
 21.24  the person is in default and the proceeding may be determined 
 21.25  against that person upon consideration of the cease and desist 
 21.26  order, the allegations of which may be considered to be true. 
 21.27     Sec. 30.  Minnesota Statutes 1994, section 326.229, 
 21.28  subdivision 4, is amended to read: 
 21.29     Subd. 4.  [ACTIONS AGAINST APPLICANTS, LICENSEES, OR 
 21.30  CERTIFICATE HOLDERS.] (a) The board may, by order, deny, refuse 
 21.31  to renew, suspend for not more than five years, temporarily 
 21.32  suspend, or revoke the application, certificate, or license of a 
 21.33  person; censure or reprimand that person; refuse to permit a 
 21.34  person to sit for examination, or refuse to release the person's 
 21.35  examination grades if the board finds that the order is in the 
 21.36  public interest and that, based on a preponderance of the 
 22.1   evidence presented, the applicant, licensee, or certificate 
 22.2   holder: 
 22.3      (1) has violated a statute, rule, or order that the board 
 22.4   has issued or is empowered to enforce; 
 22.5      (2) has engaged in conduct or acts that are fraudulent, 
 22.6   deceptive, or dishonest whether or not the conduct or acts 
 22.7   relate to the practice of public accounting, providing that the 
 22.8   fraudulent, deceptive, or dishonest conduct or acts reflect 
 22.9   adversely on the person's ability or fitness to engage in the 
 22.10  practice of public accounting; 
 22.11     (3) has engaged in conduct or acts that are negligent or 
 22.12  otherwise in violation of the standards established by Minnesota 
 22.13  Rules, parts 1100.4700 and 1100.4800, where the conduct or acts 
 22.14  relate to the practice of public accounting; 
 22.15     (4) has been convicted of or has pled guilty or nolo 
 22.16  contendere to a felony or crime, an element of which is 
 22.17  dishonesty or fraud, or has been shown to have engaged in acts 
 22.18  or practices tending to show that the applicant, licensee, or 
 22.19  certificate holder is incompetent or has engaged in conduct 
 22.20  reflecting adversely on the person's ability or fitness to 
 22.21  engage in the practice of public accounting; 
 22.22     (5) employed fraud or deception in obtaining a certificate, 
 22.23  license, renewal, or reinstatement or in passing all or a 
 22.24  portion of the examination; 
 22.25     (6) has had the person's public accounting license, 
 22.26  certificate, right to examine, or other similar authority 
 22.27  revoked, suspended, canceled, limited, or not renewed for cause, 
 22.28  or otherwise disciplined in any state, commonwealth, or 
 22.29  territory of the United States, in the District of Columbia, or 
 22.30  in any foreign country; 
 22.31     (7) has had the person's right to practice before any 
 22.32  federal, state, or other government agency revoked, suspended, 
 22.33  canceled, limited, or not renewed, or otherwise disciplined; 
 22.34     (8) failed to meet any requirement for the issuance or 
 22.35  renewal of the person's license or certificate; or 
 22.36     (9) with respect to temporary suspension orders, has 
 23.1   committed an act, engaged in conduct, or committed practices 
 23.2   that may result or may have resulted, in the opinion of the 
 23.3   board or the complaint committee if authorized by the board, in 
 23.4   an immediate threat to the public.  
 23.5      (b) In lieu of or in addition to any remedy provided in 
 23.6   paragraph (a), the board may require, as a condition of 
 23.7   continued licensure, possession of certificate, termination of 
 23.8   suspension, reinstatement of license or certificate, 
 23.9   examination, or release of examination grades, that the person: 
 23.10     (1) submit to a quality review of the person's ability, 
 23.11  skills, or quality of work, conducted in such fashion and by 
 23.12  such persons, entity, or entities as the board may require; and 
 23.13     (2) complete to the satisfaction of the board such 
 23.14  continuing professional education courses as the board may 
 23.15  specify. 
 23.16     (c) In lieu of or in addition to any remedy provided in 
 23.17  paragraph (a), the board may require the applicant, licensee, or 
 23.18  certificate holder: 
 23.19     (1) in the case of a license or certificate revocation, 
 23.20  suspension, or voluntary surrender, to submit to the board a 
 23.21  true and complete list of the person's clientele, including 
 23.22  complete names, addresses, telephone numbers, and facsimile 
 23.23  numbers, so that the board can notify the person's clientele of 
 23.24  the board's action; and 
 23.25     (2) to make restitution to the complainant. 
 23.26     (d) Service of the order is effective if the order is 
 23.27  served on the applicant, licensee, certificate holder, or 
 23.28  counsel of record personally or by certified mail to the most 
 23.29  recent address provided to the board for the licensee, 
 23.30  certificate holder, applicant, person or counsel of record.  The 
 23.31  order shall state the reasons for the entry of the order.  
 23.32     (e) The board shall schedule a contested case hearing 
 23.33  within 30 days after issuance of the order.  The administrative 
 23.34  law judge shall issue a report within 30 days after closing of 
 23.35  the contested case hearing record, notwithstanding the 
 23.36  provisions of Minnesota Rules, part 1400.8100, subpart 3.  The 
 24.1   board shall issue a final order within 30 days after receipt of 
 24.2   that report. 
 24.3      (d) (f) All hearings required by this subdivision shall be 
 24.4   conducted in accordance with chapter 14 except with respect to 
 24.5   temporary suspension orders, as provided for in subdivision 5, 
 24.6   paragraph (e). 
 24.7      Sec. 31.  Minnesota Statutes 1994, section 326.229, 
 24.8   subdivision 6, is amended to read: 
 24.9      Subd. 6.  [VIOLATION; PENALTIES; COSTS OF PROCEEDING.] (a) 
 24.10  The board may impose a civil penalty not to exceed $2,000 per 
 24.11  violation upon a person who violates an order, statute, or rule 
 24.12  that the board has issued or is empowered to enforce.  
 24.13     (b) The board may, in addition, impose a fee to reimburse 
 24.14  the board for all or part of the cost of the proceedings 
 24.15  resulting in disciplinary action authorized by this section, the 
 24.16  imposition of civil penalties, or the issuance of a cease and 
 24.17  desist order.  The fee may be imposed when the board shows that 
 24.18  the position of the person who violates a statute, rule, or 
 24.19  order that the board has issued or is empowered to enforce is 
 24.20  not substantially justified, unless special circumstances make 
 24.21  an award unjust, notwithstanding the provisions of Minnesota 
 24.22  Rules, part 1400.8401.  The costs include, but are not limited 
 24.23  to, the amount paid by the board for services from the office of 
 24.24  administrative hearings, attorney fees, court reporters, 
 24.25  witnesses, reproduction of records, board members' per diem 
 24.26  compensation, board staff time, and expense incurred by board 
 24.27  members and staff. 
 24.28     (c) All hearings required by this subdivision shall be 
 24.29  conducted in accordance with chapter 14. 
 24.30     Sec. 32.  Minnesota Statutes 1994, section 326.229, 
 24.31  subdivision 7, is amended to read: 
 24.32     Subd. 7.  [REINSTATEMENT.] The board may reinstate a 
 24.33  suspended, revoked, or surrendered certificate or license upon 
 24.34  petition of the former or suspended certificate holder or 
 24.35  licensee.  The board may, in its sole discretion, require that 
 24.36  the former certificate holder or licensee submit to the board 
 25.1   evidence of having obtained up to 120 hours of continuing 
 25.2   professional education credits that would have been required had 
 25.3   the former certificate holder held a certificate or the former 
 25.4   licensee been licensed continuously.  The board may, in its sole 
 25.5   discretion, place any other conditions upon reinstatement of a 
 25.6   suspended, revoked, or surrendered certificate or license that 
 25.7   it finds appropriate and necessary to ensure that the purposes 
 25.8   of sections 326.165 to 326.229 326.236 are met.  No suspended 
 25.9   certificate or license shall be reinstated until the former 
 25.10  certificate holder or licensee has completed one-half of the 
 25.11  suspension. 
 25.12     Sec. 33.  Minnesota Statutes 1994, section 326.229, is 
 25.13  amended by adding a subdivision to read: 
 25.14     Subd. 8.  [CONTEMPT ORDER.] The board may docket its orders 
 25.15  and obtain orders of contempt of court upon violation of any 
 25.16  board order. 
 25.17     Sec. 34.  [326.235] [DEFINITIONS.] 
 25.18     Subdivision 1.  [SCOPE.] For purposes of this section and 
 25.19  section 326.236, the terms in this section have the meaning 
 25.20  given. 
 25.21     Subd. 2.  [APPOINTED PERSON.] "Appointed person" means the 
 25.22  person responsible for the services performed by the practice 
 25.23  entity at each practice entity location in Minnesota and for 
 25.24  signing, on behalf of the practice entity, all reports referred 
 25.25  to in section 326.236, subdivision 4. 
 25.26     Subd. 3.  [FINANCIAL STATEMENTS.] "Financial statements" 
 25.27  means a presentation of financial data, including accompanying 
 25.28  notes, derived from accounting records and intended to 
 25.29  communicate an entity's economic resources or obligations at a 
 25.30  point in time, or the changes therein for a period of time. 
 25.31     Financial presentations included in tax returns and forms 
 25.32  prepared for income tax authorities are not financial statements.
 25.33     The following financial presentations are examples of 
 25.34  financial statements: 
 25.35     (1) balance sheet; 
 25.36     (2) statement of income; 
 26.1      (3) statement of retained earnings; 
 26.2      (4) statement of cash flows; 
 26.3      (5) statement of changes in owners' equity; 
 26.4      (6) statement of assets and liabilities; 
 26.5      (7) statement of revenue and expenses; 
 26.6      (8) summary of operations; 
 26.7      (9) statement of operations by product lines; 
 26.8      (10) statement of cash receipts and disbursements; and 
 26.9      (11) special reports based upon accounting data. 
 26.10     A financial statement may be, for example, that of a 
 26.11  corporation, a consolidated group of corporations, a combined 
 26.12  group of affiliated entities, a not-for-profit organization, a 
 26.13  government unit, an estate or trust, a partnership, a 
 26.14  proprietorship, a segment of any of these, or an individual.  
 26.15  The method of preparation, manual or computer, is not relevant 
 26.16  to the definition of a financial statement. 
 26.17     Subd. 4.  [PRACTICE ENTITY] "Practice entity" means a sole 
 26.18  proprietorship, partnership, business corporation, or limited 
 26.19  liability company or partnership, or any other form of business 
 26.20  practice authorized by Minnesota laws, that: 
 26.21     (1) uses the term "accounting" or any form of that word in 
 26.22  its name; or 
 26.23     (2) is engaged in the performance or the offering to 
 26.24  perform for a fee, for a client or potential client, one or more 
 26.25  kinds of services involving the use of accounting skills which 
 26.26  results in the preparation of unaudited financial statements, 
 26.27  schedules, or data as permitted by section 326.236, subdivision 
 26.28  4. 
 26.29     "Practice entity" does not include insurance agents or 
 26.30  brokers, banks, or other financial institutions, registered 
 26.31  investment advisors or their agents, or registered 
 26.32  broker-dealers or their agents. 
 26.33     Sec. 35.  [326.236] [FILING BY PRACTICE ENTITIES.] 
 26.34     Subdivision 1.  [FILING REQUIRED.] After January 1, 1996, 
 26.35  all practice entities not capable of being licensed as CPAs, 
 26.36  LPAs, or CPA or LPA firms shall make annual filings with the 
 27.1   board on a form established by the board. 
 27.2      Subd. 2.  [RULES.] The board shall make rules to cover the 
 27.3   necessary costs of ensuring that practice entities comply with 
 27.4   specified filing requirements, and to ensure that these entities 
 27.5   and their employees comply with the board's continuing 
 27.6   professional education, practice monitoring, and code of conduct 
 27.7   rules. 
 27.8      Subd. 3.  [PROHIBITED ACTIVITIES.] Filing with the board 
 27.9   does not entitle practice entities to: 
 27.10     (1) perform or report on any attestation services including 
 27.11  audits and reviews of historical financial statements and 
 27.12  examination of prospective financial statements; or 
 27.13     (2) hold themselves out as licensed CPA or LPA firms, use 
 27.14  any title or designation prohibited by section 326.211, 
 27.15  subdivision 5, or in any way imply that by making the filing 
 27.16  required by subdivision 1 that the entity is licensed, 
 27.17  certified, or registered by or with the board. 
 27.18     Subd. 4.  [PERMITTED ACTIVITIES.] Filing with the board 
 27.19  entitles practice entities to prepare unaudited financial 
 27.20  statements, schedules, or data.  Preparation of these financial 
 27.21  statements, schedules, or data and the required accompanying 
 27.22  report prepared and signed by the practice entity shall comply 
 27.23  with statements on standards for accounting and review services 
 27.24  issued by the American Institute of Certified Public Accountants 
 27.25  as they relate to compilation engagements.  Notwithstanding the 
 27.26  requirement to comply with these statements, practice entities 
 27.27  shall not refer to the "American Institute of Certified Public 
 27.28  Accountants" or "AICPA" in an accompanying report. 
 27.29     Subd. 5.  [APPOINTED PERSONS.] (a) Each practice entity 
 27.30  required to file with the board by subdivision 1 shall designate 
 27.31  at least one appointed person for every ten employees of the 
 27.32  practice entity who provide professional services relating to 
 27.33  the preparation of financial statements for a client. 
 27.34     (b) An appointed person shall have the following 
 27.35  qualifications: 
 27.36     (1) attained the age of 18 years; 
 28.1      (2) not be in violation of section 326.229, subdivision 4; 
 28.2      (3) have the following education or experience: 
 28.3      (i) at least 60 quarter credits, 30 of which must be in 
 28.4   accounting or program related courses, such as business law, 
 28.5   computerized accounting, and spreadsheets from a 
 28.6   vocational/technical school, junior college, business school, 
 28.7   college, or university fully accredited by a recognized 
 28.8   accrediting agency listed with the United States Department of 
 28.9   Education; 
 28.10     (ii) six years experience in the accounting field; or 
 28.11     (iii) some combination of this education and experience as 
 28.12  determined by the board by rule to be appropriate; and 
 28.13     (4) pass an ethics examination administered by the board. 
 28.14     (c) A licensed CPA or LPA may be an appointed person. 
 28.15     Subd. 6.  [PROHIBITED ACTIVITIES BY PERSONS WITH REVOKED OR 
 28.16  SUSPENDED LICENSES OR CERTIFICATES.] A person whose CPA or LPA 
 28.17  license or certificate has been revoked or suspended by the 
 28.18  board, or who has voluntarily surrendered the license or 
 28.19  certificate, shall not, during the period of revocation or 
 28.20  suspension, be permitted to: 
 28.21     (1) be an appointed person in a practice entity described 
 28.22  in subdivision 5; or 
 28.23     (2) have the person's name in the title of the practice 
 28.24  entity. 
 28.25     Subd. 7.  [CONTINUING EDUCATION.] During every three-year 
 28.26  period following filing, the appointed person or persons of each 
 28.27  practice entity shall take at least 90 hours of continuing 
 28.28  professional education in accounting related subjects as 
 28.29  specified by the board and report all continuing professional 
 28.30  education to the board. 
 28.31     Subd. 8.  [FILING UPDATES.] At the conclusion of every 
 28.32  three-year period following filing, one of the appointed persons 
 28.33  of the practice entity shall send to the board: 
 28.34     (1) a synopsis of the practice entity's business activity 
 28.35  for the past three years on a form provided by the board; 
 28.36     (2) a copy of one financial statement and report thereon 
 29.1   prepared by the practice entity under subdivision 4, unless the 
 29.2   entity certifies on a form provided by the board that its 
 29.3   practice is limited to tax preparation; 
 29.4      (3) a list of all partners, shareholders, and employees of 
 29.5   the practice entity who were at the date of employment, or 
 29.6   during any period of employment, a subject of proceedings 
 29.7   brought by the board pursuant to section 214.11; 
 29.8      (4) a list of all appointed persons of the practice entity; 
 29.9   and 
 29.10     (5) other information that the board may require by rule. 
 29.11     Subd. 9.  [CODE OF PROFESSIONAL CONDUCT.] In order to 
 29.12  practice in Minnesota, the practice entity and the appointed 
 29.13  person or persons shall abide by the code of professional 
 29.14  conduct the board shall establish by rule. 
 29.15     Subd. 10.  [DISCIPLINE.] A practice entity required to file 
 29.16  with the board under subdivision 1, appointed persons of 
 29.17  practice entities, and all employees of the practice entity who 
 29.18  hold certificates or licenses issued by the board or are exam 
 29.19  applicants are subject to section 326.229. 
 29.20     Subd. 11.  [RULES.] Licensed CPAs and LPAs or certificate 
 29.21  holders who are partners, shareholders, employees, or members of 
 29.22  a practice entity as described in subdivision 1 shall comply 
 29.23  with Minnesota Rules, chapter 1100, except where specifically 
 29.24  exempted. 
 29.25     Sec. 36.  [APPROPRIATION.] 
 29.26     For the purposes of this act, $50,000 is appropriated to 
 29.27  the Minnesota state board of accountancy for the biennium ending 
 29.28  June 30, 1997.  The board may fill one additional complement 
 29.29  position. 
 29.30     Sec. 37.  [REPEALER.] 
 29.31     Minnesota Statutes 1994, sections 326.191; 326.20, 
 29.32  subdivision 2; 326.21; 326.212, subdivision 4; and 326.225, are 
 29.33  repealed. 
 29.34     Sec. 38.  [INSTRUCTION TO REVISOR.] 
 29.35     The revisor shall change the reference "326.229" to 
 29.36  "326.236" in Minnesota Statutes, sections 3.972 and 319A.02. 
 30.1      Sec. 39.  [EFFECTIVE DATE.] 
 30.2      Section 9 is effective three years after the date of final 
 30.3   enactment.  Sections 1 to 8 and 10 to 37 are effective on the 
 30.4   day following final enactment.