1.1                          A bill for an act 
  1.2             relating to accountants; modifying licensing 
  1.3             provisions; providing for firm licensure; authorizing 
  1.4             rulemaking; amending Minnesota Statutes 1996, sections 
  1.5             326.165; 326.17; 326.18; 326.19; 326.20; 326.211; 
  1.6             326.212, subdivisions 1, 4, 5, and by adding a 
  1.7             subdivision; 326.22, subdivision 2; 326.223; 326.228; 
  1.8             and 326.229, subdivisions 3, 4, 6, and by adding a 
  1.9             subdivision; proposing coding for new law in Minnesota 
  1.10            Statutes, chapter 326; repealing Minnesota Statutes 
  1.11            1996, sections 326.191; 326.21; and 326.225. 
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13     Section 1.  Minnesota Statutes 1996, section 326.165, is 
  1.14  amended to read: 
  1.15     326.165 [BOARD OF ACCOUNTANCY POLICY; DEFINITIONS.] 
  1.16     Subdivision 1.  [PURPOSE.] It is the policy of this state 
  1.17  to promote the dependability of information which is used for 
  1.18  guidance in financial transactions or for accounting for or 
  1.19  assessing the status or performance of commercial and 
  1.20  noncommercial enterprises, whether public, private, or 
  1.21  governmental.  The public interest requires that persons engaged 
  1.22  in the practice of public accounting be qualified; that a public 
  1.23  authority competent to prescribe and assess the qualifications 
  1.24  of public accountants be established; that the expression of any 
  1.25  form of assurance or of opinions on financial statements be 
  1.26  reserved to persons who demonstrate their ability and fitness to 
  1.27  observe and apply the standards of the accounting profession; 
  1.28  and that the use of accounting titles likely to confuse the 
  2.1   public be prohibited. 
  2.2      Subd. 1a.  [SCOPE.] For the purposes of sections 326.165 to 
  2.3   326.229, the definitions in this section have the meanings given.
  2.4      Subd. 2.  [PRACTICE OF PUBLIC ACCOUNTING.] The "practice of 
  2.5   public accounting" is:  (a) (1) holding one's self out to the 
  2.6   public as skilled in the knowledge and practice of 
  2.7   accounting; or (b) (2) expressing any form of assurance on 
  2.8   financial statements; or (c) (3) expressing opinions on 
  2.9   financial statements for credit purposes, for use in courts and 
  2.10  for other purposes involving third parties. 
  2.11     Subd. 3.  [ASSURANCE OR OPINIONS ON FINANCIAL STATEMENTS.] "
  2.12  Assurance or opinions on financial statements" are any opinions 
  2.13  or assurance expressed in accordance with generally accepted 
  2.14  auditing standards or other authoritative professional standards 
  2.15  as to the fairness of presentation of information which is used 
  2.16  for guidance in financial transactions or for accounting for or 
  2.17  assessing the status or performance of commercial and 
  2.18  noncommercial enterprises, whether public, private, or 
  2.19  governmental.  
  2.20     Subd. 4.  [CPA.] "CPA" means certified public accountant. 
  2.21     Subd. 5.  [FINANCIAL STATEMENTS.] "Financial statements" 
  2.22  means a presentation of financial data, including accompanying 
  2.23  notes, if any, intended to communicate an entity's economic 
  2.24  resources and/or obligations at a point in time, or the changes 
  2.25  therein for a period of time, in accordance with generally 
  2.26  accepted accounting principles or a comprehensive basis of 
  2.27  accounting other than generally accepted accounting principles. 
  2.28     Incidental financial data to support recommendations to a 
  2.29  client, management advisory service reports, or tax returns and 
  2.30  supporting schedules do not constitute financial statements.  
  2.31  The statement, affidavit, or signature of preparers required on 
  2.32  tax returns neither constitutes an opinion on financial 
  2.33  statements nor requires a disclaimer of the opinion. 
  2.34     Subd. 6.  [FIRM.] "Firm" means an entity of CPAs or LPAs 
  2.35  organized as a CPA or LPA partnership, professional corporation, 
  2.36  professional limited liability company, or professional limited 
  3.1   liability partnership, any cooperative auditing organization as 
  3.2   specified in section 326.192, subdivision 4, or any CPA or LPA 
  3.3   practice in any other form of business organization authorized 
  3.4   by law for use by CPAs and LPAs, including individual partners 
  3.5   or shareholders. 
  3.6      Subd. 7.  [LPA.] "LPA" means licensed public accountant.  
  3.7   Licensed public accountants are those accountants who were 
  3.8   eligible for licensure on July 1, 1979, under the law in effect 
  3.9   on that date and who were issued a license as a licensed public 
  3.10  accountant by the board at that time. 
  3.11     Sec. 2.  Minnesota Statutes 1996, section 326.17, is 
  3.12  amended to read: 
  3.13     326.17 [BOARD OF ACCOUNTANCY.] 
  3.14     (a) A board of accountancy is created to carry out the 
  3.15  purposes and enforce the provisions of sections 326.165 to 
  3.16  326.229.  It consists of between seven and nine citizens of this 
  3.17  state appointed by the governor as provided in this section.  
  3.18  Two shall be public members as defined by section 214.02, five 
  3.19  shall be currently actively licensed certified public 
  3.20  accountants, and two shall be actively licensed public 
  3.21  accountants under the provisions of sections 326.165 to 
  3.22  326.229.  When the number of licensed public accountants in this 
  3.23  state drops below 100, their representation on the board of 
  3.24  accountancy shall drop to one and the board shall consist of two 
  3.25  public members, five currently actively licensed certified 
  3.26  public accountants, and one actively licensed public 
  3.27  accountant.  At the time when the number of licensed public 
  3.28  accountants in this state drops below 25, the licensed public 
  3.29  accountants shall lose their representation on the board, except 
  3.30  that the licensed public accountant then serving on the board 
  3.31  shall be allowed to complete the term of office and.  The board 
  3.32  shall then consist of two public members and five currently 
  3.33  actively licensed certified public accountants.  
  3.34     (b) Membership terms, compensation of members, removal of 
  3.35  members, the filling of membership vacancies, and fiscal year 
  3.36  and reporting requirements shall be as provided in sections 
  4.1   214.07 to 214.09.  The provision of staff, administrative 
  4.2   services, and office space; the review and processing of 
  4.3   complaints; the setting of board fees; and other provisions 
  4.4   relating to board operations shall be as provided in chapter 214 
  4.5   and sections 326.165 to 326.229. 
  4.6      Sec. 3.  Minnesota Statutes 1996, section 326.18, is 
  4.7   amended to read: 
  4.8      326.18 [BOARD, DUTIES, OFFICERS, RULES, EXAMINATIONS.] 
  4.9      Subdivision 1.  [MEMBERS AND OFFICERS.] A majority of 
  4.10  the qualified members of the board constitutes a quorum.  The 
  4.11  board shall elect one of its number as chair, another as 
  4.12  vice-chair, and another as secretary and treasurer, who shall 
  4.13  hold their respective offices for a term of one year and until 
  4.14  their successors are elected.  The affirmative vote of a 
  4.15  majority of the qualified members of the board is considered the 
  4.16  action of the board.  
  4.17     Subd. 2.  [DUTIES.] The board shall enforce the standard of 
  4.18  general education;, the standard of special education in the 
  4.19  science and art of accounting;, and the standard of good 
  4.20  character and general public experience, as prescribed in 
  4.21  sections 326.165 to 326.229, in all examinations conducted 
  4.22  thereunder.  
  4.23     Subd. 3.  [RULES.] The board shall make rules for the 
  4.24  conduct of applicants' examinations and the character and scope 
  4.25  of the examinations, the method and time of filing applications 
  4.26  for examinations and their form and contents, and all other 
  4.27  rules proper to carry into effect the purposes of sections 
  4.28  326.165 to 326.229.  The board shall make rules to govern 
  4.29  administration of the board, examinations, issuance of 
  4.30  certificates, licensing, professional conduct and discipline, 
  4.31  continuing education, fees, and practice monitoring. 
  4.32     Subd. 4.  [EXAMINATION.] The board may make use of all or 
  4.33  any part of the uniform certified public accountant examination 
  4.34  and advisory grading service provided by the American Institute 
  4.35  of Certified Public Accountants if it deems it appropriate to 
  4.36  assist it in performing its duties.  These examinations shall be 
  5.1   conducted by the board of accountancy.  The examinations shall 
  5.2   take place as often as may be convenient in the opinion of the 
  5.3   board.  The board may make rules necessary to implement and 
  5.4   enforce sections 326.165 to 326.229, and 214.12, including but 
  5.5   not limited to rules of professional conduct, pertaining to 
  5.6   individuals, partnerships and corporations practicing public 
  5.7   accounting which it deems consistent with or required by the 
  5.8   public welfare and rules of continuing education to be met by 
  5.9   persons licensed under sections 326.165 to 326.229. 
  5.10     Subd. 5.  [RECORDS, CERTIFICATES, AND LICENSES.] (a) The 
  5.11  board shall keep records of its proceedings, an accurate list of 
  5.12  all applications made, licenses and certificates issued, and 
  5.13  licenses and certificates revoked disciplined pursuant to 
  5.14  section 326.229, and shall keep proper financial records in 
  5.15  which there shall be entered a complete statement of the cash 
  5.16  receipts and disbursements.  All records of the board shall be 
  5.17  subject to chapter 13. 
  5.18     (b) The board shall issue to each person who satisfies the 
  5.19  examination requirements of section 326.19, subdivision 1, a 
  5.20  certified public accountant certificate and shall maintain a 
  5.21  record of that issuance.  The board shall issue a license as a 
  5.22  certified public accountant to each holder of a certified public 
  5.23  accountant certificate who satisfies the experience requirements 
  5.24  for a license as a certified public accountant or to a person 
  5.25  who has been issued a certified public accountant certificate 
  5.26  under section 326.19, subdivision 3.  The board shall maintain a 
  5.27  record of the issuance.  It shall adopt and provide itself with 
  5.28  a seal with a band inscribed "Certified Public Accountant, State 
  5.29  of Minnesota," with the coat of arms of Minnesota in the center, 
  5.30  which seal shall be affixed to each certificate of the certified 
  5.31  public accountant issued under sections 326.17 326.165 to 
  5.32  326.229. 
  5.33     (c) The board shall issue to each person who qualifies for 
  5.34  a license under sections 326.17 326.165 to 326.229 as a licensed 
  5.35  public accountant a certificate as a licensed public accountant 
  5.36  and shall maintain a record of that issuance.  It shall adopt 
  6.1   and provide itself with a seal with a band inscribed "Licensed 
  6.2   Public Accountant, State of Minnesota," with the coat of arms of 
  6.3   Minnesota in the center, which seal shall be affixed to each 
  6.4   certificate of the licensed public accountant, issued under 
  6.5   sections 326.17 326.165 to 326.229.  All records of the board 
  6.6   shall be open to the inspection of the public at the office of 
  6.7   its secretary. 
  6.8      Sec. 4.  Minnesota Statutes 1996, section 326.19, is 
  6.9   amended to read: 
  6.10     326.19 [LICENSURE; QUALIFICATIONS OF CERTIFIED PUBLIC 
  6.11  ACCOUNTANTS; CERTIFICATES AND LICENSING.] 
  6.12     Subdivision 1.  [CERTIFICATES AND LICENSES AS CERTIFIED 
  6.13  PUBLIC ACCOUNTANTS.] (a) A certified public accountant 
  6.14  certificate shall be granted to any person: 
  6.15     (a) (1) who has attained the age of 18 years; and 
  6.16     (b) (2) who is of good character; and 
  6.17     (c) (3) who has successfully completed an examination in 
  6.18  the subjects and at the times the board may prescribe in its 
  6.19  rules; and 
  6.20     (4) who meets all other requirements for issuance of a 
  6.21  certificate, including payment of required fees.  
  6.22     (b) The examination shall be administered by the board only 
  6.23  to a candidate who holds:  
  6.24     (i) (1) holds a master's degree with a major in accounting 
  6.25  from a college or university that is fully accredited by the 
  6.26  North Central Association of Colleges and Secondary Schools, or 
  6.27  an equivalent accrediting association, or who has in the opinion 
  6.28  of the board at least an equivalent education a recognized 
  6.29  accrediting agency listed with the United States Department of 
  6.30  Education; or 
  6.31     (ii) (2) holds a baccalaureate degree, with a major in 
  6.32  accounting, from a college or university that is fully 
  6.33  accredited by the North Central Association of Colleges and 
  6.34  Secondary Schools, or an equivalent accrediting association, or 
  6.35  whose credits are acceptable to the University of Minnesota for 
  6.36  admission to graduate study, a recognized accrediting agency 
  7.1   listed with the United States Department of Education or who has 
  7.2   in the opinion of the board at least an equivalent education; or 
  7.3      (iii) (3) holds a baccalaureate degree from a college or 
  7.4   university that is fully accredited by the North Central 
  7.5   Association of Colleges and Secondary Schools, or an equivalent 
  7.6   accrediting association, or whose credits are acceptable to the 
  7.7   University of Minnesota for admission to graduate study, or a 
  7.8   recognized accrediting agency listed with the United States 
  7.9   Department of Education and who has in the opinion of the board 
  7.10  at least an equivalent education, or providing at least one year 
  7.11  of experience of the type specified in subdivision 4, has been 
  7.12  completed; or 
  7.13     (iv) (4) provides evidence of having completed two or more 
  7.14  years of study with passing grade average or above from a 
  7.15  college or, university that is fully accredited by the North 
  7.16  Central Association of Colleges and Secondary Schools, or an 
  7.17  equivalent accrediting association, or whose credits are 
  7.18  acceptable to the University of Minnesota for admission to 
  7.19  graduate study, or a, technical college, or a Minnesota licensed 
  7.20  private vocational school which fulfills the requirements of 
  7.21  sections 141.21 to 141.36, that is fully accredited by a 
  7.22  recognized accrediting agency listed with the United States 
  7.23  Department of Education or who has in the opinion of the board 
  7.24  at least an equivalent education, providing that at least three 
  7.25  years experience of the type specified in subdivision 4, has 
  7.26  been completed; or 
  7.27     (v) (5) holds a diploma as a graduate of an accredited high 
  7.28  school or who has in the opinion of the board at least an 
  7.29  equivalent education, providing that at least five years 
  7.30  experience of the type specified in subdivision 4 has been 
  7.31  completed.  
  7.32     Subd. 2.  [EXPERIENCE.] A certified public accountant 
  7.33  license shall be granted to any person who has been issued a 
  7.34  certified public accountant certificate under subdivision 3.  
  7.35  Those persons holding certified public accountant certificates 
  7.36  issued under subdivision 1 who meet all other requirements for 
  8.1   licensure, including payment of required fees, shall be granted 
  8.2   licenses as certified public accountants, providing that they 
  8.3   have completed the following required experience of the type 
  8.4   specified in subdivision 4 in addition to any experience 
  8.5   required in subdivision 1, clause (c)(i) to (v) paragraph (b): 
  8.6      (i) (1) for those whose educational qualifications meet the 
  8.7   requirements of subdivision 1, paragraph (b), clause (c)(i) (1), 
  8.8   the experience requirement is one year; 
  8.9      (ii) (2) for those whose educational qualifications meet 
  8.10  the requirements of subdivision 1, paragraph (b), clause 
  8.11  (c)(ii) (2), the experience requirement is two years; 
  8.12     (iii) (3) for those whose educational and experience 
  8.13  qualifications meet the requirements of subdivision 1, paragraph 
  8.14  (b), clause (c)(iii) (3), the additional required experience is 
  8.15  two years; 
  8.16     (iv) (4) for those whose educational and experience 
  8.17  qualifications meet the requirements of subdivision 1, paragraph 
  8.18  (b), clause (c)(iv) (4), the additional required experience is 
  8.19  two years; and 
  8.20     (v) (5) for those whose educational and experience 
  8.21  qualifications meet the requirements of subdivision 1, paragraph 
  8.22  (b), clause (c)(v) (5), the additional required experience is 
  8.23  one year. 
  8.24     Subd. 3.  [CERTIFICATE AND LICENSE WITHOUT EXAMINATION.] 
  8.25  The state board of accountancy may, in its discretion, waive the 
  8.26  examination of, and may issue a certificate and license as, a 
  8.27  certified public accountant to any person possessing the 
  8.28  qualifications mentioned in this section, who: 
  8.29     (a) (1) is the holder of a C.P.A. CPA license or 
  8.30  certificate, issued under the laws of another state, provided 
  8.31  the requirements for the license or certificate in the state 
  8.32  which has granted it to the applicant are, in the opinion of the 
  8.33  state board of accountancy, equivalent to those herein 
  8.34  provided in subdivisions 1 and 2; or 
  8.35     (b) shall be (2) is the holder of a degree or certificate 
  8.36  of certified public accountant or chartered accountant, or the 
  9.1   equivalent thereof, issued in any foreign country, provided that 
  9.2   the requirements for the degree or certificate are equivalent to 
  9.3   those herein provided in subdivisions 1 and 2 for the license of 
  9.4   certified public accountant in this state.; or 
  9.5      (c) Shall (3) has in another jurisdiction have completed 
  9.6   successfully an examination which, in the opinion of the board, 
  9.7   is comparable to that prescribed by the board in its rules and 
  9.8   provided that such the person has satisfied the other 
  9.9   requirements of subdivisions 1 and 2. 
  9.10     Subd. 4.  [QUALIFYING EXPERIENCE FOR EXAMINATION AND 
  9.11  GRANTING OF LICENSE.] Qualifying experience for subdivisions 1, 
  9.12  2, and 3 include public accounting experience: 
  9.13     (1) as a staff employee of a certified public 
  9.14  accountant or, licensed public accountant, or a firm of 
  9.15  certified public accountants or public accountants, or a 
  9.16  corporation formed licensed for the practice of public 
  9.17  accounting; or 
  9.18     (2) as an auditor in the office of the legislative auditor 
  9.19  or state auditor, or as an auditor or examiner with any other 
  9.20  agency of government, which experience, in the opinion of the 
  9.21  board is equally comprehensive and diversified; or 
  9.22     (3) as a self-employed public accountant or as a partner in 
  9.23  a firm of public accountants; or 
  9.24     (4) in any combination of the foregoing capacities. 
  9.25     Sec. 5.  [326.192] [LICENSURE; QUALIFICATIONS OF FIRMS.] 
  9.26     Subdivision 1.  [APPLICATION.] Upon application made upon 
  9.27  the affidavit of a general partner of the partnership, secretary 
  9.28  of the corporation, or member of the limited liability company 
  9.29  or partnership who is a CPA or a LPA of this state in good 
  9.30  standing, the board shall issue a firm license.  The license 
  9.31  shall be valid for a period prescribed by the board, unless the 
  9.32  license is revoked sooner.  The application shall confer upon 
  9.33  the board the consent of the partnership, corporation, or 
  9.34  limited liability company or partnership, and of the general 
  9.35  partner, secretary, or member making the application, to the 
  9.36  board's jurisdiction over the acts of the partnership and its 
 10.1   partners or agents, of the corporation and its shareholders or 
 10.2   agents within the state, or of the limited liability company or 
 10.3   partnership and its members or agents. 
 10.4      Subd. 2.  [CPA FIRMS.] No partnership, corporation, or 
 10.5   limited liability company or partnership shall style itself as a 
 10.6   firm of CPAs unless: 
 10.7      (1) all partners, shareholders, or members resident in this 
 10.8   state are CPAs of this state; 
 10.9      (2) all managers in charge of offices maintained in this 
 10.10  state are CPAs of this state; 
 10.11     (3) all partners, shareholders, or members, wherever 
 10.12  situated, are CPAs of one of the states or territories or of the 
 10.13  District of Columbia; and 
 10.14     (4) the partnership, corporation, or limited liability 
 10.15  company or partnership is duly licensed under this section. 
 10.16     Subd. 3.  [LPA FIRMS.] No partnership, corporation, or 
 10.17  limited liability company or partnership shall style itself as a 
 10.18  firm of LPAs unless: 
 10.19     (1) all partners, shareholders, or members resident in this 
 10.20  state are LPAs or CPAs of this state; 
 10.21     (2) all managers in charge of offices maintained in this 
 10.22  state are LPAs or CPAs of this state; 
 10.23     (3) all partners, shareholders, or members, wherever 
 10.24  situated, are LPAs of this state or CPAs of one of the states or 
 10.25  territories or the District of Columbia; and 
 10.26     (4) the partnership, corporation, or limited liability 
 10.27  company or partnership is duly licensed under this section. 
 10.28     Subd. 4.  [COOPERATIVE AUDITING ORGANIZATION.] Any 
 10.29  cooperative auditing organization organized under chapter 308A 
 10.30  is qualified for a cooperative auditing service license and may 
 10.31  style itself as a licensed cooperative auditing service if: 
 10.32     (1) for a minimum of one year prior to July 1, 1979, it 
 10.33  rendered auditing or accounting of business analysis services to 
 10.34  its members only; and 
 10.35     (2) its managers in charge of offices maintained in this 
 10.36  state are certified public accountants or licensed public 
 11.1   accountants of this state.  
 11.2   Cooperative auditing services shall comply with all requirements 
 11.3   imposed by sections 326.165 to 326.229 and the board's rules 
 11.4   governing firms. 
 11.5      Sec. 6.  Minnesota Statutes 1996, section 326.20, is 
 11.6   amended to read: 
 11.7      326.20 [RENEWAL; UNLICENSED PRACTICE.] 
 11.8      Subdivision 1.  [LICENSE RENEWAL OF CERTIFIED PUBLIC 
 11.9   ACCOUNTANTS AND LICENSED PUBLIC ACCOUNTANTS.] (a) Every holder 
 11.10  of a certified public accountant CPA license or a licensed 
 11.11  public accountant an LPA license issued by the board, if 
 11.12  engaged, or intending to be engaged, in public the practice of 
 11.13  public accounting within this state at any time during a 
 11.14  calendar year, shall renew the license as active as prescribed 
 11.15  by the board by rule. 
 11.16     (b) Every holder of a CPA license or an LPA license issued 
 11.17  by the board, who does not intend to actively engage in the 
 11.18  practice of public accounting within this state at any time 
 11.19  during a calendar year, shall renew the license as inactive or 
 11.20  active, as prescribed by the board by rule under authority 
 11.21  granted in section 326.18, subdivision 3.  Previously licensed 
 11.22  individuals who do not actively engage in the practice of public 
 11.23  accounting in any manner or who do not hold out as CPAs or LPAs 
 11.24  in any manner are not required to obtain a license nor may the 
 11.25  board require those individuals to surrender their 
 11.26  certificates.  The board must provide for the relicensing of 
 11.27  those individuals if they wish to return to the practice of 
 11.28  public accounting.  
 11.29     (c) The board may establish temporary, active, and inactive 
 11.30  licenses and adopt rules, under authority granted in section 
 11.31  326.18, subdivision 3, governing them. 
 11.32     (d) The board shall, upon application made by any holder of 
 11.33  an unrevoked Minnesota or unsuspended license as a certified 
 11.34  public accountant CPA or unrevoked or unsuspended Minnesota 
 11.35  license as a licensed public accountant LPA, renew the license 
 11.36  which shall be good for a period prescribed by the board, unless 
 12.1   the said certificate or license shall sooner be is revoked or 
 12.2   suspended during that period.  Interim licenses shall be issued 
 12.3   to individuals who have satisfied the provisions of 
 12.4   sections 326.17 326.165 to 326.229 within the year.  If a 
 12.5   license has been conditioned, limited, or otherwise restricted 
 12.6   or disciplined pursuant to section 326.229, any other condition, 
 12.7   limitation, or discipline shall remain for the term of the 
 12.8   board's order imposing the condition, limitation, or other 
 12.9   discipline, notwithstanding renewal of the license.  
 12.10     (e) The CPA certificates of persons who fail to renew their 
 12.11  licenses as required by this subdivision for more than two years 
 12.12  after expiration shall be automatically revoked by order of the 
 12.13  board.  This includes all persons who, on the effective date of 
 12.14  this section, did not hold an active or an inactive license in 
 12.15  1996, 1997, and 1998.  The orders may be issued by the board 
 12.16  without following the procedures of chapter 14, provided the 
 12.17  board notifies each such person by mail at the person's last 
 12.18  known address on file with the board at least three days prior 
 12.19  to the issuance of any such order.  No such notice is required 
 12.20  if the last communication sent by the board to a licensee was 
 12.21  returned to the board by the United States Postal Service as 
 12.22  undeliverable and with no forwarding address.  Certificates so 
 12.23  revoked by the board may be reinstated, if at all, pursuant to 
 12.24  section 326.229, subdivision 7.  This paragraph shall not apply 
 12.25  to previously licensed individuals who have notified the board 
 12.26  that they will not hold out as CPAs or LPAs in any manner or 
 12.27  practice public accounting in any manner. 
 12.28     Subd. 2.  [LICENSURE OF PARTNERSHIPS AND CORPORATIONS.] 
 12.29  Every partnership or corporation in which one or more certified 
 12.30  public accountants or licensed public accountants of this state 
 12.31  is a partner or shareholder, if it is engaged, or intends to be 
 12.32  engaged, in public practice within this state at any time shall 
 12.33  be licensed by the state board of accountancy for that period.  
 12.34  Upon application made upon the affidavit of a general partner of 
 12.35  the partnership or secretary of the corporation who is a 
 12.36  certified public accountant or a licensed public accountant of 
 13.1   this state in good standing, the board shall issue a license 
 13.2   which shall be good for a period prescribed by the board, unless 
 13.3   the license shall sooner be revoked.  Interim licenses shall be 
 13.4   issued to partnerships or corporations which have satisfied the 
 13.5   provisions of this subdivision.  The application shall confer 
 13.6   upon the board the consent of the partnership or corporation, 
 13.7   and of the general partner or secretary making the application, 
 13.8   to the board's jurisdiction over the acts of the partnership and 
 13.9   its partners or agents or of the corporation and its 
 13.10  shareholders or agents within the state. 
 13.11     No partnership or corporation shall style itself as a firm 
 13.12  of certified public accountants unless (a) all partners or 
 13.13  shareholders resident in this state are certified public 
 13.14  accountants of this state, (b) all managers in charge of offices 
 13.15  maintained in this state are certified public accountants of 
 13.16  this state, (c) all partners or shareholders, wherever situated, 
 13.17  are certified public accountants of one of the states or 
 13.18  territories or of the District of Columbia and (d) the 
 13.19  partnership or corporation is duly licensed under this section.  
 13.20     No partnership or corporation shall style itself as a firm 
 13.21  of licensed public accountants unless (a) all partners or 
 13.22  shareholders resident in this state are licensed public 
 13.23  accountants or certified public accountants of this state, (b) 
 13.24  all managers in charge of offices maintained in this state are 
 13.25  licensed public accountants or certified public accountants of 
 13.26  this state, (c) all partners or shareholders, wherever situated, 
 13.27  are licensed public accountants of this state or certified 
 13.28  public accountants of one of the states or territories or the 
 13.29  District of Columbia and (d) the partnership or corporation is 
 13.30  duly licensed under this section.  
 13.31     Any cooperative auditing organization organized under 
 13.32  chapter 308A (a) which for a minimum of one year prior to July 
 13.33  1, 1979, has been rendering auditing, accounting of business 
 13.34  analysis services to its members only, and (b) whose managers in 
 13.35  charge of offices maintained in this state are certified public 
 13.36  accountants or licensed public accountants of this state, shall 
 14.1   be deemed to be qualified for a cooperative auditing service 
 14.2   license and may style itself as a licensed cooperative auditing 
 14.3   service.  
 14.4      Subd. 3.  [UNLICENSED PRACTICE.] It shall be is unlawful 
 14.5   for any certified public accountant CPA or any LPA, or a firm 
 14.6   defined under section 326.165, subdivision 6, partnership 
 14.7   containing one or more certified public accountants to engage in 
 14.8   public the practice of public accounting within this state 
 14.9   unless such certified public accountant or the CPA, LPA, 
 14.10  partnership or firm defined under section 326.165, subdivision 
 14.11  6, is duly licensed as provided by this section.  A partnership 
 14.12  shall be deemed in public practice within this state if it 
 14.13  performs professional accounting services for a fee.  A 
 14.14  certified public accountant shall be deemed in public practice 
 14.15  within this state if the accountant performs professional 
 14.16  accounting services for a fee within this state to the extent 
 14.17  required by sections 326.165 to 326.229. 
 14.18     Subd. 4.  [TAX CLEARANCE CERTIFICATE.] (a) Notwithstanding 
 14.19  subdivisions 1 and 2, the board may not issue or renew a license 
 14.20  under sections 326.165 to 326.229 if the commissioner of revenue 
 14.21  notifies the board and the licensee or applicant for a license 
 14.22  that the licensee or applicant owes the state delinquent taxes 
 14.23  in the amount of $500 or more.  The board may issue or renew the 
 14.24  license only if (1) the commissioner of revenue issues a tax 
 14.25  clearance certificate and (2) the commissioner of revenue or the 
 14.26  licensee or applicant forwards a copy of the clearance to the 
 14.27  board.  The commissioner of revenue may issue a clearance 
 14.28  certificate only if the licensee or applicant does not owe the 
 14.29  state any uncontested delinquent taxes. 
 14.30     (b) For purposes of this subdivision, the following terms 
 14.31  have the meanings given. 
 14.32     (1) "Taxes" are all taxes payable to the commissioner of 
 14.33  revenue, including penalties and interest due on those taxes. 
 14.34     (2) "Delinquent taxes" do not include a tax liability if 
 14.35  (i) an administrative or court action that contests the amount 
 14.36  or validity of the liability has been filed or served, (ii) the 
 15.1   appeal period to contest the tax liability has not expired, or 
 15.2   (iii) the licensee or applicant has entered into a payment 
 15.3   agreement to pay the liability and is current with the payments. 
 15.4      (c) When a licensee or applicant is required to obtain a 
 15.5   clearance certificate under this subdivision, a contested case 
 15.6   hearing must be held if the licensee or applicant requests a 
 15.7   hearing in writing to the commissioner of revenue within 30 days 
 15.8   of the date of the notice provided in paragraph (a).  The 
 15.9   hearing must be held within 45 days of the date the commissioner 
 15.10  of revenue refers the case to the office of administrative 
 15.11  hearings.  Notwithstanding any law to the contrary, the licensee 
 15.12  or applicant must be served with 20 days' notice in writing 
 15.13  specifying the time and place of the hearing and the allegations 
 15.14  against the licensee or applicant.  The notice may be served 
 15.15  personally or by mail. 
 15.16     (d) The board shall require all licensees or applicants to 
 15.17  provide their social security number and Minnesota business 
 15.18  identification number on all license applications.  Upon request 
 15.19  of the commissioner of revenue, the board must provide to the 
 15.20  commissioner of revenue a list of all licensees and applicants, 
 15.21  including the name and address, social security number, and 
 15.22  business identification number.  The commissioner of revenue may 
 15.23  request a list of the licensees and applicants no more than once 
 15.24  each calendar year. 
 15.25     Sec. 7.  [326.201] [PRACTICE MONITORING.] 
 15.26     The board shall, by rule adopted under authority granted in 
 15.27  section 326.18, subdivision 3, provide for a practice monitoring 
 15.28  program designed to ensure the competency of licensees engaged 
 15.29  in the practice of public accountancy in this state.  The 
 15.30  program shall be designed to promote remediation of deficiencies 
 15.31  in lieu of removal from or restriction of practice.  However, 
 15.32  this shall not be construed to prohibit the board from imposing 
 15.33  discipline, including removal from or restriction of practice, 
 15.34  where necessary and appropriate to protect the public.  The 
 15.35  board may determine which classes of licensees and what types of 
 15.36  practice shall be subject to practice monitoring based on the 
 16.1   need to protect the public.  For those licensees subject to the 
 16.2   rules, renewal of the license is conditional upon compliance 
 16.3   with the rules. 
 16.4      Sec. 8.  Minnesota Statutes 1996, section 326.211, is 
 16.5   amended to read: 
 16.6      326.211 [PROHIBITED ACTS.] 
 16.7      Subdivision 1.  [CERTIFIED PUBLIC ACCOUNTANT; USE OF TITLE 
 16.8   BY INDIVIDUAL.] Except as permitted by the board, no person 
 16.9   shall assume or use the title or designation "certified public 
 16.10  accountant," or the abbreviation "C.P.A. CPA" or any other 
 16.11  title, designation, words, letters, abbreviation, sign, card, or 
 16.12  device tending to indicate or imply that the person is a 
 16.13  certified public accountant, unless the person has received a 
 16.14  certificate as a certified public accountant under sections 
 16.15  326.17 326.165 to 326.229, holds a license issued under sections 
 16.16  326.17 326.165 to 326.229 which is not revoked or suspended, and 
 16.17  has all offices in this state for the practice of public 
 16.18  accounting maintained and licensed as to the extent required 
 16.19  under section 326.20 by sections 326.165 to 326.229.  
 16.20     Subd. 2.  [CERTIFIED PUBLIC ACCOUNTANT; USE OF TITLE BY 
 16.21  INDIVIDUAL ENTITY.] No partnership or, corporation, or limited 
 16.22  liability company or partnership shall assume or use the title 
 16.23  or designation "certified public accountant," or the 
 16.24  abbreviation "C.P.A. CPA," or any other title, designation, 
 16.25  words, letters, abbreviation, sign, card, or device tending to 
 16.26  indicate or imply that the partnership or, corporation, or 
 16.27  limited liability company or partnership is composed of 
 16.28  certified public accountants, unless the partnership or, 
 16.29  corporation, or limited liability company or partnership is 
 16.30  licensed as a partnership or, corporation, or limited liability 
 16.31  company or partnership of certified public accountants under 
 16.32  section 326.20 326.192 and all offices of the partnership or, 
 16.33  corporation, or limited liability company or partnership in this 
 16.34  state for the practice of public accounting are maintained and 
 16.35  licensed as required under section 326.20 326.192.  
 16.36     Subd. 3.  [LICENSED PUBLIC ACCOUNTANT; USE OF TITLE BY 
 17.1   INDIVIDUAL.] No person shall assume or use the title or 
 17.2   designation "licensed public accountant" or any other title, 
 17.3   designation, words, letters, abbreviation, sign, card, or device 
 17.4   tending to indicate or imply that the person is a licensed 
 17.5   public accountant, unless the person is licensed as a licensed 
 17.6   public accountant under section 326.191 326.20, and all of the 
 17.7   person's offices in this state for the practice of public 
 17.8   accounting are maintained and licensed as required under section 
 17.9   326.20 326.192, or unless the person has received a certificate 
 17.10  as a certified public accountant under section 326.19, holds a 
 17.11  license issued under section 326.19 or 326.20, and all of the 
 17.12  person's offices in this state for the practice of public 
 17.13  accounting are maintained and licensed as required under section 
 17.14  326.20 326.192. 
 17.15     Subd. 4.  [LICENSED PUBLIC ACCOUNTANT; USE OF TITLE BY 
 17.16  PARTNERSHIP OR CORPORATION ENTITY.] No partnership or, 
 17.17  corporation, or limited liability company or partnership shall 
 17.18  assume or use the title or designation "licensed public 
 17.19  accountant" or any other title, designation, words, letters, 
 17.20  abbreviation, sign, card, or device tending to indicate or imply 
 17.21  that the partnership or, corporation, or limited liability 
 17.22  company or partnership is composed of licensed public 
 17.23  accountants, unless the partnership or, corporation, or limited 
 17.24  liability company or partnership is licensed as a partnership, 
 17.25  corporation, or limited liability company or partnership of 
 17.26  licensed public accountants under section 326.20 326.192, and 
 17.27  all offices of the partnership or, corporation, or limited 
 17.28  liability company or partnership in this state for the practice 
 17.29  of public accounting are maintained and licensed as required 
 17.30  under section 326.20 326.192.  
 17.31     Subd. 5.  [PROHIBITED AND PERMITTED TITLES.] No person, 
 17.32  partnership, or corporation, or limited liability company or 
 17.33  partnership shall assume or use the title or designation 
 17.34  "certified accountant," "chartered accountant," "enrolled 
 17.35  accountant," "licensed accountant," "public accountant," 
 17.36  "accredited accountant," "accounting practitioner," "registered 
 18.1   accountant," or any other title or designation likely to be 
 18.2   confused with "certified public accountant," or "licensed public 
 18.3   accountant," or any of the abbreviations "C.A. CA," "L.A. LA," 
 18.4   "P.A. PA," "R.A. RA," "A.A. AA," "A.P. AP," or similar 
 18.5   abbreviations likely to be confused with "C.P.A. CPA" or "L.P.A 
 18.6   LPA."  Anyone who holds a current license issued under sections 
 18.7   326.18 and section 326.19 or 326.20 and all of whose offices in 
 18.8   this state for the practice of public accounting are maintained 
 18.9   and licensed as required under section 326.20 326.192 may hold 
 18.10  out to the public as an "auditor." 
 18.11     Subd. 6.  [FINANCIAL STATEMENT BY INDIVIDUAL.] No person's 
 18.12  name shall be signed or affixed by the person nor shall any 
 18.13  trade or assumed name be used by the person professionally or in 
 18.14  business to any opinion or certificate attesting in any way to 
 18.15  the reliability of any representation or estimate in regard to 
 18.16  any person or organization embracing (1) financial information, 
 18.17  or (2) facts respecting compliance with conditions established 
 18.18  by law or contract, including, but not limited to, statutes, 
 18.19  ordinances, rules, grants, loans, and appropriations, together 
 18.20  with any wording accompanying or contained in the opinion or 
 18.21  certificate, which indicates (a) that the person is an 
 18.22  accountant or auditor or (b) that the person has expert 
 18.23  knowledge in accounting or auditing, without holding a current 
 18.24  license issued under section 326.19 or 326.20 and all of the 
 18.25  person's offices in this state for the practice of public 
 18.26  accounting are maintained and licensed under section 326.20 
 18.27  326.192.  The provisions of this subdivision shall not prohibit 
 18.28  any officer, employee, partner, or principal of any organization 
 18.29  from affixing that person's signature to any statement or report 
 18.30  in reference to the affairs of the organization with any wording 
 18.31  designating the position, title, or office which the person 
 18.32  holds in the organization, nor shall the provisions of this 
 18.33  subdivision prohibit any act of a public official or public 
 18.34  employee in the performance of duties.  
 18.35     Subd. 7.  [FINANCIAL STATEMENT BY PARTNERSHIP OR, 
 18.36  CORPORATION, OR LIMITED LIABILITY COMPANY OR PARTNERSHIP.] No 
 19.1   person shall sign or affix a partnership or, corporate, or 
 19.2   limited liability company or partnership name to any opinion or 
 19.3   certificate attesting in any way to the reliability of any 
 19.4   representation or estimate in regard to any person or 
 19.5   organization embracing (a) financial information, or (b) facts 
 19.6   respecting compliance with conditions established by law or 
 19.7   contract, including, but not limited to, statutes, ordinances, 
 19.8   rules, grants, loans, and appropriations, together with any 
 19.9   wording accompanying or contained in the opinion or certificate 
 19.10  which indicates that the partnership or, corporation, or limited 
 19.11  liability company or partnership is composed of or employs (1) 
 19.12  accountants, or auditors or (2), persons having expert knowledge 
 19.13  in accounting or auditing, unless the partnership or, 
 19.14  corporation, or limited liability company or partnership is 
 19.15  licensed under sections 326.17 to 326.229.  
 19.16     Subd. 8.  [AUDITOR; USE OF TITLE.] No person, 
 19.17  partnership or, corporation, or limited liability company or 
 19.18  partnership not licensed under section 326.18 sections 326.19 to 
 19.19  326.20 shall assume or use the title "auditor" on any sign, 
 19.20  card, letterhead, or in any advertisement or directory without 
 19.21  indicating thereon or therein that the person, partnership or, 
 19.22  corporation, or limited liability company or partnership does 
 19.23  not hold such a license, provided that this subdivision shall 
 19.24  not prohibit any officer, employee, partner, or principal of any 
 19.25  organization from being described by the position, title, or 
 19.26  office that person holds in the organization, nor shall this 
 19.27  subdivision prohibit any act of a public official or public 
 19.28  employee in the performance of duties. 
 19.29     Subd. 9.  [TITLE INDICATING PARTNERSHIP OR, CORPORATION, OR 
 19.30  LIMITED LIABILITY COMPANY OR PARTNERSHIP.] (a) No person shall 
 19.31  assume or use the title or designation "certified public 
 19.32  accountant" or "licensed public accountant" in conjunction with 
 19.33  names indicating or implying that there is a partnership or, 
 19.34  corporation, or limited liability company or partnership, if 
 19.35  there is no bona fide partnership or, corporation, or limited 
 19.36  liability company or partnership licensed under section 326.20 
 20.1   326.192. 
 20.2      (b) No person shall assume or use the title or designation 
 20.3   "certified public accountant" or "licensed public accountant" in 
 20.4   conjunction with the designation "and Company," "and Co.," "and 
 20.5   Associates," "Co.," or a similar designation if, in any such 
 20.6   case, there is in fact no bona fide partnership or, corporation, 
 20.7   or limited liability company or partnership with more than one 
 20.8   shareholder licensed under section 326.20 326.192.  
 20.9      (c) A sole proprietor, partnership, or corporation lawfully 
 20.10  using the title or designation in conjunction with the names or 
 20.11  designation on July 1, 1992, may continue to do so if otherwise 
 20.12  in compliance with the provisions of sections 326.165 to 326.229 
 20.13  until December 31, 1999. 
 20.14     Subd. 10.  [UNLICENSED CORPORATION; PROHIBITED USE OF 
 20.15  TITLE.] No partnership, corporation, or limited liability 
 20.16  company or partnership, other than one licensed under sections 
 20.17  326.17 326.165 to 326.229, and in compliance with the rules of 
 20.18  the board, shall style itself as certified public accountants or 
 20.19  licensed public accountants, or use the abbreviation 
 20.20  "C.P.A. CPA" or "L.P.A. LPA" in connection with its corporate 
 20.21  name.  
 20.22     Sec. 9.  Minnesota Statutes 1996, section 326.212, 
 20.23  subdivision 1, is amended to read: 
 20.24     Subdivision 1.  [EMPLOYEES; ASSISTANTS.] Nothing contained 
 20.25  in sections 326.17 326.165 to 326.229 shall prohibit any person 
 20.26  not a certified public accountant or licensed public accountant 
 20.27  from serving as an employee of, or an assistant to, a certified 
 20.28  public accountant or licensed public accountant, or 
 20.29  partnership or, corporation, or limited liability company or 
 20.30  partnership composed of certified public accountants or licensed 
 20.31  public accountants, provided that the person shall not issue any 
 20.32  accounting or financial statement over the person's name. 
 20.33     Sec. 10.  Minnesota Statutes 1996, section 326.212, 
 20.34  subdivision 4, is amended to read: 
 20.35     Subd. 4.  [PERSONS PREPARING UNAUDITED FINANCIAL 
 20.36  STATEMENTS.] Nothing contained in sections 326.165 to 326.229 
 21.1   shall prohibit any person, partnership or, corporation, or 
 21.2   limited liability company or partnership, not licensed under 
 21.3   sections 326.165 to 326.229, from preparing and presenting 
 21.4   unaudited financial statements and unaudited schedules on 
 21.5   printed forms or the letterheads letterhead of the preparer if 
 21.6   they are clearly marked on each page, "unaudited."  Any person 
 21.7   or entity who prepares unaudited financial statements and 
 21.8   unaudited schedules for a client for a fee is subject to section 
 21.9   326.229 and the practice of the person or entity may be 
 21.10  disciplined by the board as provided for in section 326.229.  
 21.11  The board may discipline a person or entity based on violations 
 21.12  of sections 326.165 to 326.229, the board's rules, or 
 21.13  misrepresentations made by such person or entity regarding the 
 21.14  work the person or entity performed. 
 21.15     Sec. 11.  Minnesota Statutes 1996, section 326.212, 
 21.16  subdivision 5, is amended to read: 
 21.17     Subd. 5.  [TAX RETURNS.] Nothing contained in sections 
 21.18  326.165 to 326.229 shall prohibit any person, partnership or, 
 21.19  corporation, or limited liability company or partnership, not 
 21.20  licensed under sections 326.165 to 326.229, from preparing tax 
 21.21  returns. 
 21.22     Sec. 12.  Minnesota Statutes 1996, section 326.212, is 
 21.23  amended by adding a subdivision to read: 
 21.24     Subd. 6.  [MAINTAIN OR SURRENDER LICENSE.] Once licensed, a 
 21.25  certified public accountant or licensed public accountant in 
 21.26  order to perform any of the services listed in section 326.165, 
 21.27  subdivision 2, shall maintain an active license.  
 21.28     Sec. 13.  Minnesota Statutes 1996, section 326.22, 
 21.29  subdivision 2, is amended to read: 
 21.30     Subd. 2.  [ANNUAL LICENSE FEE.] Each person or, 
 21.31  partnership, corporation, or limited liability company or 
 21.32  partnership to whom a license is issued shall pay a renewal fee 
 21.33  at the rate set by the board for such year. 
 21.34     Sec. 14.  Minnesota Statutes 1996, section 326.223, is 
 21.35  amended to read: 
 21.36     326.223 [EQUIVALENCY.] 
 22.1      Whenever any statute or rule, city charter, ordinance, or 
 22.2   other similar statute or rule of any other political subdivision 
 22.3   of the state of Minnesota specifically requires professional 
 22.4   services to be performed by a certified public accountant, the 
 22.5   requirement shall be construed to mean certified public 
 22.6   accountant or licensed public accountant.  
 22.7      Sec. 15.  Minnesota Statutes 1996, section 326.228, is 
 22.8   amended to read: 
 22.9      326.228 [COMPLAINT COMMITTEE.] 
 22.10     The board shall establish a complaint committee to 
 22.11  investigate, mediate, or initiate administrative or legal 
 22.12  proceedings on behalf of the board with respect to complaints 
 22.13  filed with or information received by the board alleging or 
 22.14  indicating violations of sections 326.165 to 326.229.  The 
 22.15  complaint committee shall consist of three members of the board, 
 22.16  one of whom shall be a certified public accountant, and one of 
 22.17  whom shall be a licensed public accountant.  When the licensed 
 22.18  public accountants lose their representation on the board 
 22.19  pursuant to section 326.17, the complaint committee shall 
 22.20  consist of three members of the board, two of whom shall be 
 22.21  certified public accountants. 
 22.22     Sec. 16.  Minnesota Statutes 1996, section 326.229, 
 22.23  subdivision 3, is amended to read: 
 22.24     Subd. 3.  [CEASE AND DESIST ORDERS.] (a) The board, or the 
 22.25  complaint committee if authorized by the board, may issue and 
 22.26  have served upon a licensee who has previously been subject to a 
 22.27  disciplinary order by the board, an unlicensed person or, an 
 22.28  unlicensed certificate holder, or a firm an order requiring the 
 22.29  licensee, unlicensed person or, unlicensed certificate holder, 
 22.30  or firm to cease and desist from the act or practice 
 22.31  constituting a violation of the statute, rule, or order.  The 
 22.32  order shall be calculated to give reasonable notice of the 
 22.33  rights of the licensee, unlicensed person, or unlicensed 
 22.34  certificate holder, or firm to request a hearing and shall state 
 22.35  the reasons for the entry of the order.  No such order shall be 
 22.36  issued until an investigation of the facts has been conducted 
 23.1   pursuant to section 214.10. 
 23.2      (b) Service of the order is effective when the order is 
 23.3   served on the licensee, unlicensed person, unlicensed 
 23.4   certificate holder, firm, or counsel of record personally or by 
 23.5   certified mail to the most recent address provided to the board 
 23.6   for the licensee, unlicensed person, unlicensed certificate 
 23.7   holder, firm, or counsel of record.  
 23.8      (c) Unless otherwise agreed by the board, or the complaint 
 23.9   committee if authorized by the board, and the person requesting 
 23.10  the hearing, the hearing shall be held no later than 30 days 
 23.11  after the request for the hearing is received by the board.  
 23.12     (d) The administrative law judge shall issue a report 
 23.13  within 30 days of the close of the contested case hearing 
 23.14  record, notwithstanding Minnesota Rules, part 1400.8100, subpart 
 23.15  3.  Within 30 days after receiving the report and any exceptions 
 23.16  to it, the board shall issue a further order vacating, 
 23.17  modifying, or making permanent the cease and desist orders as 
 23.18  the facts require.  
 23.19     (e) If no hearing is requested within 30 days of service of 
 23.20  the order, the order becomes final and remains in effect until 
 23.21  it is modified or vacated by the board. 
 23.22     (f) If the person to whom a cease and desist order is 
 23.23  issued fails to appear at the hearing after being duly notified, 
 23.24  the person is in default and the proceeding may be determined 
 23.25  against that person upon consideration of the cease and desist 
 23.26  order, the allegations of which may be considered to be true. 
 23.27     (g) In lieu of or in addition to the order provided in 
 23.28  paragraph (a), the board may require the applicant, licensee, 
 23.29  unlicensed certificate holder, or firm to provide to the board a 
 23.30  true and complete list of the person's clientele so that they 
 23.31  can, if deemed necessary, be notified of the board's action.  
 23.32  Failure to do so, or to provide an incomplete or inaccurate 
 23.33  list, is an act discreditable. 
 23.34     Sec. 17.  Minnesota Statutes 1996, section 326.229, 
 23.35  subdivision 4, is amended to read: 
 23.36     Subd. 4.  [ACTIONS AGAINST APPLICANTS, LICENSEES, OR 
 24.1   CERTIFICATE HOLDERS.] (a) The board may, by order, deny, refuse 
 24.2   to renew, suspend for not more than five years, temporarily 
 24.3   suspend, or revoke the application, certificate, or license of a 
 24.4   person; censure or reprimand that person; prohibit that person 
 24.5   from preparing tax returns or unaudited financial statements; 
 24.6   refuse to permit a person to sit for examination, or refuse to 
 24.7   release the person's examination grades if the board finds that 
 24.8   the order is in the public interest and that, based on a 
 24.9   preponderance of the evidence presented, the applicant, 
 24.10  licensee, or certificate holder: 
 24.11     (1) has violated a statute, rule, or order that the board 
 24.12  has issued or is empowered to enforce; 
 24.13     (2) has engaged in conduct or acts that are fraudulent, 
 24.14  deceptive, or dishonest whether or not the conduct or acts 
 24.15  relate to the practice of public accounting, providing that the 
 24.16  fraudulent, deceptive, or dishonest conduct or acts reflect 
 24.17  adversely on the person's ability or fitness to engage in the 
 24.18  practice of public accounting; 
 24.19     (3) has engaged in conduct or acts that are negligent or 
 24.20  otherwise in violation of the standards established by Minnesota 
 24.21  Rules, parts 1100.4700 and 1100.4800, where the conduct or acts 
 24.22  relate to the practice of public accounting; 
 24.23     (4) has been convicted of or, has pled guilty or nolo 
 24.24  contendere to, or is sentenced as a result of the commission of 
 24.25  a felony or crime, an element of which is dishonesty or fraud, 
 24.26  or has been shown to have or admitted to having engaged in acts 
 24.27  or practices tending to show that the applicant, licensee, or 
 24.28  certificate holder is incompetent or has engaged in conduct 
 24.29  reflecting adversely on the person's ability or fitness to 
 24.30  engage in the practice of public accounting whether or not a 
 24.31  plea was entered or withheld; 
 24.32     (5) employed fraud or deception in obtaining a certificate, 
 24.33  license, renewal, or reinstatement or in passing all or a 
 24.34  portion of the examination; 
 24.35     (6) has had the person's public accounting license, 
 24.36  certificate, right to examine, or other similar authority 
 25.1   revoked, suspended, canceled, limited, or not renewed for cause, 
 25.2   or has committed unprofessional acts for which the person was 
 25.3   otherwise disciplined or sanctioned, including, but not limited 
 25.4   to, being ordered to or agreeing to cease and desist from 
 25.5   prescribed conduct, in any state, commonwealth, or territory of 
 25.6   the United States, in the District of Columbia, or in any 
 25.7   foreign country; 
 25.8      (7) has had the person's right to practice before any 
 25.9   federal, state, or other government agency revoked, suspended, 
 25.10  canceled, limited, or not renewed for cause, or has committed 
 25.11  unprofessional acts for which the person was otherwise 
 25.12  disciplined or sanctioned, including, but not limited to, being 
 25.13  ordered to or agreeing to cease and desist from prescribed 
 25.14  conduct; 
 25.15     (8) failed to meet any requirement for the issuance or 
 25.16  renewal of the person's license or certificate; or 
 25.17     (9) with respect to temporary suspension orders, has 
 25.18  committed an act, engaged in conduct, or committed practices 
 25.19  that may result or may have resulted, in the opinion of the 
 25.20  board or the complaint committee if authorized by the board, in 
 25.21  an immediate threat to the public.  
 25.22     (b) In lieu of or in addition to any remedy provided in 
 25.23  paragraph (a), the board may require, as a condition of 
 25.24  continued licensure, possession of certificate, termination of 
 25.25  suspension, reinstatement of license or certificate, 
 25.26  examination, or release of examination grades, that the person: 
 25.27     (1) submit to a quality review of the person's ability, 
 25.28  skills, or quality of work, conducted in such fashion and by 
 25.29  such persons, entity, or entities as the board may require; and 
 25.30     (2) complete to the satisfaction of the board such 
 25.31  continuing professional education courses as the board may 
 25.32  specify. 
 25.33     (c) Service of the order is effective if the order is 
 25.34  served on the applicant, licensee, firm, certificate holder, 
 25.35  person, or counsel of record personally or by certified mail to 
 25.36  the most recent address provided to the board for the licensee, 
 26.1   certificate holder, applicant, person, or counsel of record.  
 26.2   The order shall state the reasons for the entry of the order.  
 26.3      (d) All hearings required by this subdivision shall be 
 26.4   conducted in accordance with chapter 14 except with respect to 
 26.5   temporary suspension orders, as provided for in subdivision 5, 
 26.6   paragraph (e). 
 26.7      Sec. 18.  Minnesota Statutes 1996, section 326.229, is 
 26.8   amended by adding a subdivision to read: 
 26.9      Subd. 4a.  [OTHER ACTIONS AGAINST APPLICANTS, LICENSEES, OR 
 26.10  CERTIFICATE HOLDERS.] (a) In addition to the remedies authorized 
 26.11  by subdivision 4, the board may enter into an agreement with the 
 26.12  applicant, licensee, or certificate holder for corrective action 
 26.13  and may unilaterally issue a warning to an applicant, licensee, 
 26.14  or certificate holder. 
 26.15     (b) The board shall not use agreements for corrective 
 26.16  action or warnings in any situation where the applicant, 
 26.17  licensee, or certificate holder has been convicted of or pled 
 26.18  guilty or nolo contendere to a felony or crime and such felony 
 26.19  or crime is the basis of the board's action against the 
 26.20  applicant, licensee, or certificate holder; where the conduct of 
 26.21  the applicant, licensee, or certificate holder indicates a 
 26.22  pattern of repeated violations of subdivision 4, paragraph (a), 
 26.23  or the rules of the board; or where the board concludes that the 
 26.24  conduct of the applicant, licensee, or certificate holder will 
 26.25  not be deterred other than by disciplinary action pursuant to 
 26.26  subdivision 3, 4, or 5. 
 26.27     (c) Agreements for corrective action may be used by the 
 26.28  board, or the complaint committee if authorized by the board, 
 26.29  where the violation committed by the applicant, licensee, or 
 26.30  certificate holder does not warrant disciplinary action pursuant 
 26.31  to subdivision 3, 4, or 5, but where the board, or the complaint 
 26.32  committee if authorized by the board, determines that corrective 
 26.33  action is required to prevent further such violations and to 
 26.34  otherwise protect the public.  Warnings may be used by the 
 26.35  board, or the complaint committee if authorized by the board, 
 26.36  where the violation of the application, licensee, or certificate 
 27.1   holder is de minimis, does not warrant disciplinary action 
 27.2   pursuant to subdivision 3, 4, or 5, and does not require 
 27.3   corrective action to protect the public. 
 27.4      (d) Agreements for corrective action shall not be 
 27.5   considered disciplinary action against the person's application, 
 27.6   license, or certificate.  However, agreements for corrective 
 27.7   action are public data.  Warnings shall not be considered 
 27.8   disciplinary action against the person's application, license, 
 27.9   or certificate and are private data. 
 27.10     Sec. 19.  Minnesota Statutes 1996, section 326.229, 
 27.11  subdivision 6, is amended to read: 
 27.12     Subd. 6.  [VIOLATION; PENALTIES; COSTS OF PROCEEDING.] (a) 
 27.13  The board may impose a civil penalty not to exceed $2,000 per 
 27.14  violation upon a person who violates an order, statute, or rule 
 27.15  that the board has issued or is empowered to enforce.  
 27.16     (b) The board may, in addition, impose a fee to reimburse 
 27.17  the board for all or part of the cost of the proceedings, 
 27.18  including reasonable investigative costs, resulting in 
 27.19  disciplinary or corrective action authorized by this section, 
 27.20  the imposition of civil penalties, or the issuance of a cease 
 27.21  and desist order.  The fee may be imposed when the board shows 
 27.22  that the position of the person who violates a statute, rule, or 
 27.23  order that the board has issued or is empowered to enforce is 
 27.24  not substantially justified, unless special circumstances make 
 27.25  an award unjust, notwithstanding the provisions of Minnesota 
 27.26  Rules, part 1400.8401.  The costs include, but are not limited 
 27.27  to, the amount paid by the board for services from the office of 
 27.28  administrative hearings, attorney and reasonable investigative 
 27.29  fees, court reporters, witnesses, reproduction of records, board 
 27.30  members' per diem compensation, board staff time, and expense 
 27.31  incurred by board members and staff. 
 27.32     (c) All hearings required by this subdivision shall be 
 27.33  conducted in accordance with chapter 14. 
 27.34     Sec. 20.  [INSTRUCTION TO REVISOR.] 
 27.35     The revisor shall renumber the definitions in Minnesota 
 27.36  Statutes, section 326.165, in alphabetical order, as a separate 
 28.1   section and shall correct references to those sections in 
 28.2   Minnesota Statutes and Minnesota Rules. 
 28.3      Sec. 21.  [REPEALER.] 
 28.4      Minnesota Statutes 1996, sections 326.191; 326.21; and 
 28.5   326.225, are repealed.