1.1                          A bill for an act 
  1.2             relating to professions; creating the Accountancy Act 
  1.3             of 2001; authorizing rulemaking; imposing penalties; 
  1.4             amending Minnesota Statutes 2000, sections 3.972, 
  1.5             subdivision 1; 116J.70, subdivision 2a; 214.01, 
  1.6             subdivision 3; 319B.02, subdivision 19; 326.53; 
  1.7             367.36, subdivision 1; 412.222; 471.49, subdivision 
  1.8             10; and 544.42, subdivision 1; proposing coding for 
  1.9             new law as Minnesota Statutes, chapter 326A; repealing 
  1.10            Minnesota Statutes 2000, sections 326.165; 326.1655; 
  1.11            326.17; 326.18; 326.19; 326.191; 326.192; 326.197; 
  1.12            326.20; 326.201; 326.21; 326.211; 326.212; 326.22; 
  1.13            326.223; 326.224; 326.225; 326.228; and 326.229. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15                             ARTICLE 1 
  1.16                     REGULATION OF ACCOUNTANCY 
  1.17     Section 1.  [TITLE.] 
  1.18     This act may be cited as the "Accountancy Act of 2001." 
  1.19     Sec. 2.  [PURPOSE.] 
  1.20     It is the policy of this state, and the purpose of this 
  1.21  act, to promote the reliability of information that is used for 
  1.22  guidance in financial transactions or for accounting for, or 
  1.23  assessing the financial status or performance of, commercial, 
  1.24  noncommercial, and governmental enterprises.  The public 
  1.25  interest requires that persons professing special competence in 
  1.26  accountancy or offering assurance as to the reliability or 
  1.27  fairness of presentation of such information must have 
  1.28  demonstrated their qualifications to do so, and that persons who 
  1.29  have not demonstrated and maintained such qualifications, not be 
  2.1   permitted to represent themselves as having such special 
  2.2   competence or to offer such assurance; that the conduct of 
  2.3   persons licensed or registered as having special competence in 
  2.4   accountancy be regulated in all aspects of their professional 
  2.5   work; that a public authority competent to prescribe and assess 
  2.6   the qualifications and to regulate the conduct of licensees and 
  2.7   registrants be established; and that the use of titles that have 
  2.8   a capacity or tendency to deceive the public as to the status or 
  2.9   competence of the persons using such titles be prohibited. 
  2.10     Sec. 3.  [326A.01] [DEFINITIONS.] 
  2.11     Subdivision 1.  [SCOPE.] When used in this chapter, the 
  2.12  terms in this section have the meanings given. 
  2.13     Subd. 2.  [ATTEST.] "Attest" means to provide the following 
  2.14  financial statement services: 
  2.15     (1) an audit or other engagement performed in accordance 
  2.16  with the Statements on Auditing Standards (SAS); 
  2.17     (2) a review of a financial statement performed in 
  2.18  accordance with the Statements on Standards for Accounting and 
  2.19  Review Services (SSARS); and 
  2.20     (3) an examination of prospective financial information 
  2.21  performed in accordance with the Statements on Standards for 
  2.22  Attestation Engagements (SSAE). 
  2.23     Subd. 3.  [BOARD.] "Board" means the Minnesota board of 
  2.24  accountancy established under section 326A.02 or its predecessor 
  2.25  under prior law. 
  2.26     Subd. 4.  [CERTIFICATE.] "Certificate" means a certificate 
  2.27  as a certified public accountant issued under section 326A.04, 
  2.28  or corresponding provisions of prior law, or a corresponding 
  2.29  certificate as certified public accountant issued after 
  2.30  examination under the law of any other state. 
  2.31     Subd. 5.  [CLIENT.] "Client" means a person or entity that 
  2.32  agrees with a licensee, a person registered under section 
  2.33  326A.06, paragraph (b), or the person's or licensee's employers 
  2.34  to receive any professional service. 
  2.35     Subd. 6.  [COMPILATION.] "Compilation" means the provision 
  2.36  of a service performed in accordance with Statements on 
  3.1   Standards for Accounting and Review Services (SSARS) that 
  3.2   presents in the form of financial statements information that is 
  3.3   the representation of management or owners without undertaking 
  3.4   to express any assurance on the statements. 
  3.5      Subd. 7.  [CPA FIRM.] "CPA firm" means a sole 
  3.6   proprietorship, a corporation, a partnership, or any other form 
  3.7   of organization issued a permit under section 326A.05. 
  3.8      Subd. 8.  [LICENSE.] "License" means a certificate issued 
  3.9   under section 326A.04, a permit issued under section 326A.05, or 
  3.10  a certificate or permit issued under corresponding provisions of 
  3.11  prior law. 
  3.12     Subd. 9.  [LICENSEE.] "Licensee" means the holder of a 
  3.13  license. 
  3.14     Subd. 10.  [MANAGER.] "Manager" means a manager of a 
  3.15  limited liability company. 
  3.16     Subd. 11.  [MEMBER.] "Member" means a member of a limited 
  3.17  liability company. 
  3.18     Subd. 12.  [PEER REVIEW.] "Peer review" means a study, 
  3.19  appraisal, or review of one or more aspects of the professional 
  3.20  work of a certificate holder or CPA firm that performs attest or 
  3.21  compilation services, or the professional work of a person 
  3.22  registered under section 326A.06, paragraph (b), by a person or 
  3.23  persons who hold certificates and who are not affiliated with 
  3.24  the certificate holder, CPA firm, or person being reviewed. 
  3.25     Subd. 13.  [PERMIT.] "Permit" means a permit to practice as 
  3.26  a CPA firm issued under section 326A.05, or corresponding 
  3.27  provisions of prior law, or under corresponding provisions of 
  3.28  the laws of other states. 
  3.29     Subd. 14.  [PROFESSIONAL.] "Professional" means arising out 
  3.30  of or related to the specialized knowledge or skills associated 
  3.31  with certified public accountants or persons registered under 
  3.32  section 326A.06, paragraph (b). 
  3.33     Subd. 15.  [REPORT.] "Report," when used with reference to 
  3.34  financial statements, means an opinion, report, or other form of 
  3.35  language that states or implies assurance as to the reliability 
  3.36  of any financial statements and that also includes or is 
  4.1   accompanied by a statement or implication that the person or 
  4.2   firm issuing it has special knowledge or competence in 
  4.3   accounting or auditing.  Such a statement or implication of 
  4.4   special knowledge or competence may arise from use by the issuer 
  4.5   of the report of names or titles indicating that the person or 
  4.6   firm is an accountant or auditor, or from the language of the 
  4.7   report itself.  The term "report" includes any form of language 
  4.8   that disclaims an opinion when the form of language is 
  4.9   conventionally understood to imply any positive assurance as to 
  4.10  the reliability of the financial statements referred to or 
  4.11  special competence on the part of the person or firm issuing the 
  4.12  language.  It includes any other form of language that is 
  4.13  conventionally understood to imply such assurance or such 
  4.14  special knowledge or competence. 
  4.15     Subd. 16.  [STATE.] "State" means any state of the United 
  4.16  States, the District of Columbia, Puerto Rico, the U.S. Virgin 
  4.17  Islands, and Guam; except that "this state" means the state of 
  4.18  Minnesota. 
  4.19     Subd. 17.  [SUBSTANTIAL EQUIVALENCY.] "Substantial 
  4.20  equivalency" is a determination under section 326A.14 by the 
  4.21  board of accountancy or its designee that the education, 
  4.22  examination, and experience requirements contained in the 
  4.23  statutes and administrative rules of another jurisdiction are 
  4.24  comparable to, or exceed the education, examination, and 
  4.25  experience requirements contained in this chapter or that an 
  4.26  individual CPA's education, examination, and experience 
  4.27  qualifications are comparable to or exceed the education, 
  4.28  examination, and experience requirements contained in this 
  4.29  chapter. 
  4.30     Sec. 4.  [326A.02] [STATE BOARD OF ACCOUNTANCY.] 
  4.31     Subdivision 1.  [BOARD.] A board of accountancy is created 
  4.32  to carry out the purposes and enforce the provisions of this 
  4.33  chapter.  It consists of nine citizens of this state appointed 
  4.34  by the governor.  Two must be public members as defined by 
  4.35  section 214.02, and seven must be certified public accountants 
  4.36  under the provisions of this chapter.  Effective January 1, 
  5.1   2003, no fewer than five of the certified public accountants 
  5.2   must be owners or employees of a CPA firm that holds a current 
  5.3   permit and provides professional services at the time of 
  5.4   appointment and reappointment.  At least two of the seven 
  5.5   certified public accountants at the time of appointment and 
  5.6   reappointment must be owners or employees of a CPA firm that: 
  5.7      (1) holds a current permit; 
  5.8      (2) provides professional services; and 
  5.9      (3) consists of ten or fewer certified public accountants. 
  5.10     Subd. 2.  [MEMBERSHIP CONDITIONS.] Membership terms, 
  5.11  compensation of members, removal of members, the filling of 
  5.12  membership vacancies, and fiscal year and reporting requirements 
  5.13  are as provided in sections 214.07 to 214.09.  The provision of 
  5.14  staff, administrative services, and office space; the review and 
  5.15  processing of complaints; the setting of board fees; and other 
  5.16  provisions relating to board operations shall be as provided in 
  5.17  this chapter and chapter 214. 
  5.18     Any member of the board whose certificate under section 
  5.19  326A.04 is revoked or suspended automatically ceases to be a 
  5.20  member of the board. 
  5.21     Subd. 3.  [OFFICERS; PROCEEDINGS.] The board shall elect 
  5.22  one of its number as chair, another as vice-chair, and another 
  5.23  as secretary and treasurer.  The officers shall hold their 
  5.24  respective offices for a term of one year and until their 
  5.25  successors are elected.  The affirmative vote of a majority of 
  5.26  the qualified members of the board is considered the action of 
  5.27  the board.  The board shall meet at such times and places as may 
  5.28  be fixed by the board.  Meetings of the board are subject to 
  5.29  chapter 13D.  A majority of the board members then in office 
  5.30  constitutes a quorum at any meeting duly called.  The board 
  5.31  shall have a seal, which must be judicially noticed.  The board 
  5.32  shall retain or arrange for the retention of all applications 
  5.33  and all documents under oath that are filed with the board and 
  5.34  also records of its proceedings, and it shall maintain a 
  5.35  registry of the names and addresses of all licensees and 
  5.36  registrants under this chapter.  In any proceeding in court, 
  6.1   civil or criminal, arising out of or founded upon any provision 
  6.2   of this chapter, copies of records of the proceeding certified 
  6.3   as true copies under the seal of the boards shall be admissible 
  6.4   in evidence as tending to prove the contents of the records. 
  6.5      Subd. 4.  [POWERS.] The board may issue subpoenas to compel 
  6.6   the attendance of witnesses and the production of documents, to 
  6.7   administer oaths, to take testimony, to cooperate with the 
  6.8   appropriate authorities in other states in investigation and 
  6.9   enforcement concerning violations of this chapter and comparable 
  6.10  acts of other states, and to receive evidence concerning all 
  6.11  matters within the scope of this chapter.  In case of 
  6.12  disobedience of a subpoena, the board may invoke the aid of any 
  6.13  court in requiring the attendance and testimony of witnesses and 
  6.14  the production of documentary evidence.  The board, its members, 
  6.15  and its agents are immune from personal liability for actions 
  6.16  taken in good faith in the discharge of the board's 
  6.17  responsibilities, and the state shall hold the board, its 
  6.18  members, and its agents harmless from all costs, damages, and 
  6.19  attorneys' fees arising from claims and suits against them with 
  6.20  respect to matters to which such immunity applies.  The board 
  6.21  shall enforce the standard of general education, the standard of 
  6.22  special education in the science and art of accounting, and the 
  6.23  standard of good character and general experience, as prescribed 
  6.24  in this chapter. 
  6.25     Subd. 5.  [RULES.] The board may adopt rules governing its 
  6.26  administration and enforcement of this chapter and the conduct 
  6.27  of licensees and persons registered under section 326A.06, 
  6.28  paragraph (b), including: 
  6.29     (1) rules governing the board's meetings and the conduct of 
  6.30  its business; 
  6.31     (2) rules of procedure governing the conduct of 
  6.32  investigations and hearings and discipline by the board; 
  6.33     (3) rules specifying the educational and experience 
  6.34  qualifications required for the issuance of certificates and the 
  6.35  continuing professional education required for renewal of 
  6.36  certificates; 
  7.1      (4) rules of professional conduct directed to controlling 
  7.2   the quality and probity of services by licensees, and dealing 
  7.3   among other things with independence, integrity, and 
  7.4   objectivity; competence and technical standards; and 
  7.5   responsibilities to the public and to clients; 
  7.6      (5) rules governing the professional standards applicable 
  7.7   to licensees including adoption of the statements on standards 
  7.8   specified in section 326A.01, subdivision 2, and as developed 
  7.9   for general application by recognized national accountancy 
  7.10  organizations such as the American Institute of Certified Public 
  7.11  Accountants; 
  7.12     (6) rules governing the manner and circumstances of use of 
  7.13  the titles "certified public accountant," "CPA," "registered 
  7.14  accounting practitioner," and "RAP"; 
  7.15     (7) rules regarding peer review that may be required to be 
  7.16  performed under provisions of this chapter; 
  7.17     (8) rules on substantial equivalence to implement section 
  7.18  326A.14; 
  7.19     (9) rules regarding the conduct of the certified public 
  7.20  accountant examination; 
  7.21     (10) rules regarding the issuance and renewals of 
  7.22  certificates, permits, and registrations; 
  7.23     (11) rules regarding transition provisions to implement 
  7.24  this chapter; 
  7.25     (12) rules specifying the educational and experience 
  7.26  qualifications for registration, rules of professional conduct, 
  7.27  rules regarding peer review, rules governing standards for 
  7.28  providing services, and rules regarding the conduct and content 
  7.29  of examination for those persons registered under section 
  7.30  326A.06, paragraph (b); 
  7.31     (13) rules regarding fees for examinations, certificate 
  7.32  issuance and renewal, firm permits, registrations under section 
  7.33  326A.06, paragraph (b), notifications made under section 
  7.34  326A.14, and late processing fees; and 
  7.35     (14) other rules that the board considers necessary or 
  7.36  appropriate for implementing the provisions and the purposes of 
  8.1   this chapter. 
  8.2      Subd. 6.  [COMPLAINT COMMITTEE.] The board shall establish 
  8.3   a complaint committee to investigate, mediate, or initiate 
  8.4   administrative or legal proceedings on behalf of the board with 
  8.5   respect to complaints filed with or information received by the 
  8.6   board alleging or indicating violations of this chapter.  The 
  8.7   complaint committee shall consist of three members of the board. 
  8.8      Subd. 7.  [EXPENSES OF ADMINISTRATION.] The expenses of 
  8.9   administering this chapter must be paid from appropriations made 
  8.10  to the board. 
  8.11     Sec. 5.  [326A.03] [QUALIFICATIONS FOR A CERTIFICATE AS A 
  8.12  CERTIFIED PUBLIC ACCOUNTANT.] 
  8.13     Subdivision 1.  [QUALIFICATIONS.] The certificate of 
  8.14  certified public accountant shall be granted to persons of good 
  8.15  moral character who meet the education, experience, and 
  8.16  examination requirements of this section and rules adopted under 
  8.17  it and who apply under section 326A.04. 
  8.18     Good moral character for purposes of this section means 
  8.19  lack of a history of dishonest or felonious acts.  The board may 
  8.20  refuse to grant a certificate on the ground of failure to 
  8.21  satisfy this requirement only if there is a substantial 
  8.22  connection between the lack of good moral character of the 
  8.23  applicant and the professional responsibilities of a licensee 
  8.24  and if the finding by the board of lack of good moral character 
  8.25  is supported by clear and convincing evidence.  When an 
  8.26  applicant is found to be unqualified for a certificate because 
  8.27  of a lack of good moral character, the board shall furnish the 
  8.28  applicant a statement containing the findings of the board, a 
  8.29  complete record of the evidence upon which the determination was 
  8.30  based, and a notice of the applicant's right of appeal. 
  8.31     Subd. 2.  [EDUCATIONAL AND EXPERIENCE REQUIREMENTS TO TAKE 
  8.32  EXAMINATION BEFORE JULY 1, 2006.] Until July 1, 2006, the 
  8.33  examination must be administered by the board only to a 
  8.34  candidate who: 
  8.35     (1) holds a master's degree with a major in accounting from 
  8.36  a college or university that is fully accredited by a recognized 
  9.1   accrediting agency listed with the United States Department of 
  9.2   Education; 
  9.3      (2) holds a baccalaureate degree, with a major in 
  9.4   accounting, from a college or university that is fully 
  9.5   accredited by a recognized accrediting agency listed with the 
  9.6   United States Department of Education or who has in the opinion 
  9.7   of the board at least an equivalent education; 
  9.8      (3) holds a baccalaureate degree from a college or 
  9.9   university that is fully accredited by a recognized accrediting 
  9.10  agency listed with the United States Department of Education, or 
  9.11  who has in the opinion of the board at least an equivalent 
  9.12  education, provided that at least one year of experience of the 
  9.13  type specified in subdivision 8 has been completed; 
  9.14     (4) provides evidence of having completed two or more years 
  9.15  of study with a passing grade average or above from a college, 
  9.16  university, technical college, or a Minnesota licensed private 
  9.17  school that is fully accredited by a recognized accrediting 
  9.18  agency listed with the United States Department of Education, or 
  9.19  who has in the opinion of the board at least an equivalent 
  9.20  education, provided that at least three years experience of the 
  9.21  type specified in subdivision 8 has been completed; or 
  9.22     (5) holds a diploma as a graduate of an accredited high 
  9.23  school, or who has in the opinion of the board at least an 
  9.24  equivalent education, provided that at least five years 
  9.25  experience of the type specified in subdivision 8 has been 
  9.26  completed. 
  9.27     Subd. 3.  [EDUCATIONAL REQUIREMENTS TO TAKE EXAMINATION ON 
  9.28  OR AFTER JULY 1, 2006.] On or after July 1, 2006, the 
  9.29  examination must be administered by the board only to a 
  9.30  candidate who has a baccalaureate or higher degree, with a major 
  9.31  in accounting or a major in business with accounting emphasis, 
  9.32  or an equivalent education, from a college or university that is 
  9.33  fully accredited by a recognized accrediting agency listed with 
  9.34  the United States Department of Education or an equivalent 
  9.35  accrediting association. 
  9.36     Subd. 4.  [EXAMINATION REQUIREMENTS.] (a) The examination 
 10.1   required to be passed as a condition for the granting of a 
 10.2   certificate must be held as often as convenient, in the opinion 
 10.3   of the board, and must test the applicant's knowledge of the 
 10.4   subjects of accounting and auditing, and other related subjects 
 10.5   that the board may specify by rule, including but not limited to 
 10.6   business law and taxation.  The time for holding the examination 
 10.7   must be determined by the board and may be changed from time to 
 10.8   time.  The board shall prescribe by rule the methods of applying 
 10.9   for and conducting the examination, including methods for 
 10.10  grading and determining a passing grade required of an applicant 
 10.11  for a certificate.  However, the board shall to the extent 
 10.12  possible ensure that the examination itself, grading of the 
 10.13  examination, and the passing grades, are uniform with those 
 10.14  applicable in all other states.  The board may make such use of 
 10.15  all or any part of the Uniform Certified Public Accountant 
 10.16  Examination and Advisory Grading Service of the American 
 10.17  Institute of Certified Public Accountants and may contract with 
 10.18  third parties to perform administrative services with respect to 
 10.19  the examination that it considers appropriate to assist it in 
 10.20  performing its duties under this paragraph. 
 10.21     (b) The board may charge, or provide for a third party 
 10.22  administering the examination to charge, each applicant a fee. 
 10.23     Subd. 5.  [EXPERIENCE REQUIREMENTS FOR CERTIFICATE BEFORE 
 10.24  JULY 1, 2006.] Until July 1, 2006, those persons who have passed 
 10.25  the examination required by this section and who meet all other 
 10.26  requirements for a certificate, including payment of required 
 10.27  fees, must be granted certificates as certified public 
 10.28  accountants, providing that they have completed the following 
 10.29  experience requirements of the type specified in subdivision 8 
 10.30  in addition to any experience already required in subdivision 2: 
 10.31     (1) for those whose educational qualifications meet the 
 10.32  requirements of subdivision 2, clause (1), the experience 
 10.33  requirement is one year; 
 10.34     (2) for those whose educational qualifications meet the 
 10.35  requirements of subdivision 2, clause (2), the experience 
 10.36  requirement is two years; 
 11.1      (3) for those whose educational and experience 
 11.2   qualifications meet the requirements of subdivision 2, clause 
 11.3   (3), the additional required experience is two years; 
 11.4      (4) for those whose educational and experience 
 11.5   qualifications meet the requirements of subdivision 2, clause 
 11.6   (4), the additional required experience is two years; and 
 11.7      (5) for those whose educational and experience 
 11.8   qualifications meet the requirements of subdivision 2, clause 
 11.9   (5), the additional required experience is one year. 
 11.10     Subd. 6.  [EXPERIENCE AND EDUCATIONAL REQUIREMENTS FOR 
 11.11  CERTIFICATE ON OR AFTER JULY 1, 2006.] (a) On or after July 1, 
 11.12  2006, those persons who have passed the examination required in 
 11.13  this section must be granted certificates as certified public 
 11.14  accountants provided they certify to the board that they have 
 11.15  completed at least 150 semester or 225 quarter hours at a 
 11.16  college or university that is fully accredited by a recognized 
 11.17  accrediting agency listed with the United States Department of 
 11.18  Education, or an equivalent accrediting association, and have 
 11.19  completed at least one year of experience of the type specified 
 11.20  in paragraph (b). 
 11.21     (b) An applicant for initial issuance of a certificate 
 11.22  under this subdivision shall show that the applicant has had one 
 11.23  year of experience.  Acceptable experience includes providing 
 11.24  any type of service or advice involving the use of accounting, 
 11.25  attest, compilation, management advisory, financial advisory, 
 11.26  tax, or consulting skills, as verified by a licensee and meeting 
 11.27  requirements prescribed by the board by rule.  Acceptable 
 11.28  experience may be gained through employment in government, 
 11.29  industry, academia, or public practice.  Experience as an 
 11.30  auditor in the office of the legislative auditor or state 
 11.31  auditor, as verified by a licensee, shall be acceptable 
 11.32  experience. 
 11.33     Subd. 7.  [EQUIVALENT EDUCATION CRITERIA.] The board, in 
 11.34  consultation with the University of Minnesota, the Minnesota 
 11.35  state colleges and universities, private colleges, and private 
 11.36  career schools regulated under chapter 141, shall establish 
 12.1   criteria to assess equivalent education for purposes of 
 12.2   subdivision 3. 
 12.3      Subd. 8.  [QUALIFYING EXPERIENCE UNTIL JULY 1, 2006.] Until 
 12.4   July 1, 2006, qualifying experience includes public accounting 
 12.5   experience: 
 12.6      (1) as a staff employee of a certified public accountant, 
 12.7   or a firm; 
 12.8      (2) as an auditor in the office of the legislative auditor 
 12.9   or state auditor, or as an auditor of examiner with any other 
 12.10  agency of government, if the experience, in the opinion of the 
 12.11  board, is equally comprehensive and diversified; 
 12.12     (3) as a self-employed public accountant or as a partner in 
 12.13  a firm; or 
 12.14     (4) in any combination of the foregoing capacities. 
 12.15     Sec. 6.  [326A.04] [ISSUANCE AND RENEWAL OF CERTIFICATES, 
 12.16  AND MAINTENANCE OF COMPETENCY.] 
 12.17     Subdivision 1.  [ELIGIBILITY.] The board shall grant or 
 12.18  renew certificates to persons who make application and 
 12.19  demonstrate: 
 12.20     (1) that their qualifications, including where applicable 
 12.21  the qualifications prescribed by section 326A.03, are in 
 12.22  accordance with this section; or 
 12.23     (2) that they are eligible under the substantial 
 12.24  equivalency standard in section 326A.14, subdivision 1, 
 12.25  paragraph (b), which requires licensure for those certified 
 12.26  public accountants who establish their principal places of 
 12.27  business in another state.  The holder of a certificate issued 
 12.28  under this section may only provide attest services in a CPA 
 12.29  firm that holds a permit issued under section 326A.05. 
 12.30     Subd. 2.  [TIMING.] (a) Certificates must be initially 
 12.31  issued and renewed for periods of not more than one year but in 
 12.32  any event must expire on the December 31 following issuance or 
 12.33  renewal.  Applications for certificates must be made in the 
 12.34  form, and in the case of applications for renewal between the 
 12.35  dates, specified by the board in rule.  The board shall grant or 
 12.36  deny an application no later than 90 days after the application 
 13.1   is filed in proper form.  If the applicant seeks the opportunity 
 13.2   to show that issuance or renewal of a certificate was mistakenly 
 13.3   denied, or if the board is unable to determine whether it should 
 13.4   be granted or denied, the board may issue to the applicant a 
 13.5   provisional certificate that expires 90 days after its issuance, 
 13.6   or when the board determines whether or not to issue or renew 
 13.7   the certificate for which application was made, whichever occurs 
 13.8   first. 
 13.9      (b) Certificate holders who do not provide professional 
 13.10  services and do not use the certified public accountant 
 13.11  designation in any manner are not required to renew their 
 13.12  certificates provided they have notified the board as provided 
 13.13  in board rule and comply with the requirements for nonrenewal as 
 13.14  specified in board rule. 
 13.15     Subd. 3.  [RESIDENTS OF OTHER STATES.] (a) With regard to 
 13.16  applicants who do not qualify for reciprocity under the 
 13.17  substantial equivalency standard in section 326A.14, subdivision 
 13.18  1, paragraph (b), the board shall issue a certificate to a 
 13.19  holder of a certificate, license, or permit issued by another 
 13.20  state upon a showing that: 
 13.21     (1) the applicant passed the examination required for 
 13.22  issuance of the applicant's certificate with grades that would 
 13.23  have been passing grades at the time in this state; 
 13.24     (2) the applicant had four years of experience outside of 
 13.25  this state of the type described in section 326A.03, subdivision 
 13.26  6, paragraph (b), if application is made on or after July 1, 
 13.27  2006, or section 326A.03, subdivision 8, if application is made 
 13.28  before July 1, 2006; or the applicant meets equivalent 
 13.29  requirements prescribed by the board by rule, after passing the 
 13.30  examination upon which the applicant's certificate was based and 
 13.31  within the ten years immediately preceding the application; and 
 13.32     (3) if the applicant's certificate, license, or permit was 
 13.33  issued more than four years prior to the application for 
 13.34  issuance of an initial certificate under this subdivision, that 
 13.35  the applicant has fulfilled the requirements of continuing 
 13.36  professional education that would have been applicable under 
 14.1   subdivision 4. 
 14.2      (b) As an alternative to the requirements of paragraph (a), 
 14.3   a certificate holder licensed by another state who establishes a 
 14.4   principal place of business in this state shall request the 
 14.5   issuance of a certificate from the board prior to establishing 
 14.6   the principal place of business.  The board shall issue a 
 14.7   certificate to the person if the person's individual certified 
 14.8   public accountant qualifications, upon verification, are 
 14.9   substantially equivalent to the certified public accountant 
 14.10  licensure requirements of this chapter. 
 14.11     Subd. 4.  [PROGRAM OF LEARNING.] For renewal of a 
 14.12  certificate under this section, each licensee shall participate 
 14.13  in a program of learning designed to maintain professional 
 14.14  competency.  The program of learning must comply with rules 
 14.15  adopted by the board.  The board may by rule create an exception 
 14.16  to this requirement for licensees who do not perform or offer to 
 14.17  perform for the public one or more kinds of services involving 
 14.18  the use of accounting or auditing skills, including issuance of 
 14.19  reports on financial statements or of one or more kinds of 
 14.20  management advisory, financial advisory or consulting services, 
 14.21  or the preparation of tax returns or the furnishing of advice on 
 14.22  tax matters.  A licensee granted such an exception by the board 
 14.23  must place the word "inactive" adjacent to the CPA title on any 
 14.24  business card, letterhead, or any other document or device, with 
 14.25  the exception of the licensee's certificate on which the CPA 
 14.26  title appears. 
 14.27     Subd. 5.  [FEE.] The board shall charge a fee for each 
 14.28  application for initial issuance or renewal of a certificate 
 14.29  under this section. 
 14.30     Subd. 6.  [OTHER STATE LICENSES.] Applicants for initial 
 14.31  issuance or renewal of certificates under this section shall in 
 14.32  their applications list all states in which they have applied 
 14.33  for or hold certificates, licenses, or permits and list any past 
 14.34  denial, revocation, or suspension of a certificate, license, or 
 14.35  permit.  Each holder of or applicant for a certificate under 
 14.36  this section shall notify the board in writing, within 30 days 
 15.1   after its occurrence, of any issuance, denial, revocation, or 
 15.2   suspension of a certificate, license, or permit by another state.
 15.3      Subd. 7.  [CERTIFICATES ISSUED BY FOREIGN COUNTRIES.] The 
 15.4   board shall issue a certificate to a holder of a substantially 
 15.5   equivalent foreign country designation, provided that: 
 15.6      (1) the foreign authority that granted the designation 
 15.7   makes similar provision to allow a person who holds a valid 
 15.8   certificate issued by this state to obtain the foreign 
 15.9   authority's comparable designation; 
 15.10     (2) the foreign designation: 
 15.11     (i) was duly issued by a foreign authority that regulates 
 15.12  the practice of public accountancy and the foreign designation 
 15.13  has not expired or been revoked or suspended; 
 15.14     (ii) entitles the holder to issue reports upon financial 
 15.15  statements; and 
 15.16     (iii) was issued upon the basis of educational, 
 15.17  examination, and experience requirements established by the 
 15.18  foreign authority or by law; and 
 15.19     (3) the applicant: 
 15.20     (i) received the designation, based on educational and 
 15.21  examination standards substantially equivalent to those in 
 15.22  effect in this state, at the time the foreign designation was 
 15.23  granted; 
 15.24     (ii) has, within the ten years immediately preceding the 
 15.25  application, completed an experience requirement that is 
 15.26  substantially equivalent to the requirement in section 326A.03, 
 15.27  subdivision 6, paragraph (b), if application is made on or after 
 15.28  July 1, 2006, or section 326A.03, subdivision 8, if application 
 15.29  is made before July 1, 2006, in the jurisdiction that granted 
 15.30  the foreign designation; completed four years of professional 
 15.31  experience in this state; or met equivalent requirements 
 15.32  prescribed by the board by rule; and 
 15.33     (iii) passed a uniform qualifying examination in national 
 15.34  standards and an examination on the laws, regulations, and code 
 15.35  of ethical conduct in effect in this state acceptable to the 
 15.36  board. 
 16.1      Subd. 8.  [OTHER JURISDICTIONS IN WHICH FOREIGN APPLICANT 
 16.2   IS LICENSED.] An applicant under subdivision 7 shall in the 
 16.3   application list all jurisdictions, foreign and domestic, in 
 16.4   which the applicant has applied for or holds a designation to 
 16.5   practice public accountancy.  Each holder of a certificate 
 16.6   issued under subdivision 7 shall notify the board in writing, 
 16.7   within 30 days after its occurrence, of any issuance, denial, 
 16.8   revocation, or suspension of a designation or commencement of a 
 16.9   disciplinary or enforcement action by any jurisdiction. 
 16.10     Subd. 9.  [APPLICATION BY FOREIGN CERTIFICATE HOLDER.] The 
 16.11  board has the sole authority to interpret the application of the 
 16.12  provisions of subdivisions 7 and 8. 
 16.13     Subd. 10.  [PEER REVIEW.] The board shall by rule require 
 16.14  as a condition for renewal of a certificate under this section 
 16.15  by any certificate holder who performs compilation services for 
 16.16  the public other than through a CPA firm, that the individual 
 16.17  undergo, no more frequently than once every three years, a peer 
 16.18  review conducted in a manner specified by the board in rule.  
 16.19  The review shall include verification that the individual has 
 16.20  met the competency requirements set out in professional 
 16.21  standards for the services described in this subdivision as set 
 16.22  forth by rule. 
 16.23     Subd. 11.  [AUTOMATIC REVOCATION.] The certificates of 
 16.24  persons who fail to renew their certificates for more than two 
 16.25  years after expiration shall be automatically revoked by order 
 16.26  of the board.  The orders may be issued by the board without 
 16.27  following the procedures of chapter 14, provided the board 
 16.28  notifies each such person by mail at the person's last known 
 16.29  address on file with the board at least three days prior to the 
 16.30  issuance of any such order.  No notice is required if the last 
 16.31  communication sent by the board to a licensee was returned to 
 16.32  the board by the United States Postal Service as undeliverable 
 16.33  and with no forwarding address.  Certificates so revoked by the 
 16.34  board may be reinstated, if at all, under section 326A.09.  This 
 16.35  subdivision does not apply to certified public accountants who 
 16.36  have notified the board that they will not use the CPA 
 17.1   designation in any manner and will not provide professional 
 17.2   services. 
 17.3      Sec. 7.  [326A.05] [CPA FIRM PERMITS TO PRACTICE, ATTEST 
 17.4   AND COMPILATION COMPETENCY, AND PEER REVIEW.] 
 17.5      Subdivision 1.  [GENERAL.] The board shall grant or renew 
 17.6   permits to practice as a CPA firm to entities that make 
 17.7   application and demonstrate their qualifications in accordance 
 17.8   with this section.  A firm must hold a permit issued under this 
 17.9   section in order to provide attest services or to use the title 
 17.10  "CPAs" or "CPA firm." 
 17.11     Subd. 2.  [TIMING.] Permits must be initially issued and 
 17.12  renewed for periods of not more than one year but in any event 
 17.13  must expire on the December 31 following issuance or renewal.  
 17.14  Applications for permits shall be made in the form, and in the 
 17.15  case of applications for renewal between the dates, as the board 
 17.16  specifies in rule.  The board shall grant or deny an application 
 17.17  no later than 90 days after the application is filed in proper 
 17.18  form.  If the applicant seeks the opportunity to show that 
 17.19  issuance or renewal of a permit was mistakenly denied or if the 
 17.20  board is not able to determine whether it should be granted or 
 17.21  denied, the board may issue to the applicant a provisional 
 17.22  permit, which expires 90 days after its issuance, or when the 
 17.23  board determines whether or not to issue or renew the permit for 
 17.24  which application was made, whichever occurs first. 
 17.25     Subd. 3.  [QUALIFICATIONS.] (a) An applicant for initial 
 17.26  issuance or renewal of a permit to practice under this section 
 17.27  shall comply with the requirements in this subdivision. 
 17.28     (b) Notwithstanding chapter 319B or any other provision of 
 17.29  law, a simple majority of the ownership of the firm, in terms of 
 17.30  financial interests and voting rights of all partners, officers, 
 17.31  shareholders, members, or managers, must belong to holders of 
 17.32  certificates who are licensed in some state, and the partners, 
 17.33  officers, shareholders, members, or managers, whose principal 
 17.34  place of business is in this state, and who perform professional 
 17.35  services in this state, must hold valid certificates issued 
 17.36  under section 326A.04 or the corresponding provision of prior 
 18.1   law.  Although firms may include nonlicensee owners, the firm 
 18.2   and its ownership must comply with rules adopted by the board.  
 18.3   The firm shall register all nonlicensee owners with the state 
 18.4   board as set forth by rule. 
 18.5      (c) A CPA firm may include nonlicensee owners provided that:
 18.6      (1) the firm designates a licensee of this state, who is 
 18.7   responsible for the proper registration of the firm and 
 18.8   identifies that individual to the board; 
 18.9      (2) all nonlicensee owners are active individual 
 18.10  participants in the CPA firm or affiliated entities; and 
 18.11     (3) the firm complies with other requirements imposed by 
 18.12  the board in rule. 
 18.13     (d) An individual licensee who is responsible for 
 18.14  supervising attest or compilation services and signs or 
 18.15  authorizes someone to sign the accountant's report on the 
 18.16  financial statements on behalf of the firm, shall meet the 
 18.17  competency requirements set out in the professional standards 
 18.18  for such services. 
 18.19     (e) An individual licensee who signs or authorizes someone 
 18.20  to sign the accountants' report on the financial statements on 
 18.21  behalf of the firm shall meet the competency requirement of 
 18.22  paragraph (d). 
 18.23     Subd. 4.  [INITIAL ISSUANCE OR RENEWAL.] An applicant for 
 18.24  initial issuance or renewal of a permit to practice under this 
 18.25  section shall register each office of the firm within this state 
 18.26  with the board and to show that all attest and compilation 
 18.27  services rendered in this state are under the charge of a person 
 18.28  holding a valid certificate, or the corresponding provision of 
 18.29  prior law. 
 18.30     Subd. 5.  [FEES.] The board shall charge a fee for each 
 18.31  application for initial issuance or renewal of a permit under 
 18.32  this section. 
 18.33     Subd. 6.  [OTHER JURISDICTIONS IN WHICH APPLICANT HOLDS A 
 18.34  PERMIT.] An applicant for initial issuance or renewal of permits 
 18.35  under this section shall in the applicant's application list all 
 18.36  states in which the applicant has applied for or holds permits 
 19.1   as a CPA firm and list any past denial, revocation, or 
 19.2   suspension of a permit by any other state.  Each holder of or 
 19.3   applicant for a permit under this section shall notify the board 
 19.4   in writing, within 30 days after its occurrence, of any change 
 19.5   in the identities of partners, officers, shareholders, members, 
 19.6   or managers whose principal place of business is in this state, 
 19.7   any change in the number or location of offices within this 
 19.8   state, any change in the identity of the persons in charge of 
 19.9   such offices, and any issuance, denial, revocation, or 
 19.10  suspension of a permit by any other state. 
 19.11     Subd. 7.  [CORRECTIVE ACTIONS, REVOCATION.] Firms that fall 
 19.12  out of compliance with the provisions of the section due to 
 19.13  changes in firm ownership or personnel, after receiving or 
 19.14  renewing a permit, shall take corrective action to bring the 
 19.15  firm back into compliance as quickly as possible.  Failure to 
 19.16  bring the firm back into compliance within a reasonable period 
 19.17  as defined by the board rule shall result in the suspension or 
 19.18  revocation of the firm permit. 
 19.19     Subd. 8.  [PEER REVIEW; RULES.] (a) The board shall by rule 
 19.20  require as a condition to renewal of permits under this section, 
 19.21  that applicants undergo, no more frequently than once every 
 19.22  three years, peer reviews conducted in a manner specified by the 
 19.23  board.  The review must include a verification that individuals 
 19.24  in the firm who are responsible for supervising attest and 
 19.25  compilation services and who sign or authorize someone to sign 
 19.26  the accountant's report on the financial statements on behalf of 
 19.27  the firm meet the competency requirements set out in the 
 19.28  professional standards for such services.  In addition, the 
 19.29  rules must meet the requirements in paragraphs (b) to (d). 
 19.30     (b) The rules must be adopted reasonably in advance of the 
 19.31  time when they first become effective. 
 19.32     (c) The rules must include reasonable provision for 
 19.33  compliance by an applicant showing that it has, within the 
 19.34  preceding three years, undergone a peer review that is a 
 19.35  satisfactory equivalent to peer review generally required 
 19.36  pursuant to this subdivision. 
 20.1      (d) The rules must require, with respect to peer reviews 
 20.2   contemplated by paragraph (c), that they be subject to oversight 
 20.3   by an oversight body established or sanctioned by board rule.  
 20.4   This body shall periodically report to the board on the 
 20.5   effectiveness of the review program under its charge, and 
 20.6   provide to the board a listing of firms that have participated 
 20.7   in a peer review program that is satisfactory to the board. 
 20.8      (e) The rules must require, with respect to peer reviews 
 20.9   contemplated by paragraph (c), that the peer review processes be 
 20.10  operated and documents maintained in a manner designed to 
 20.11  preserve confidentiality, and that neither the board nor any 
 20.12  third party, other than the oversight body, has access to 
 20.13  documents furnished or generated in the course of the review.  
 20.14  The applicant shall submit to the board reports and letters 
 20.15  received at the conclusion of the peer review process as 
 20.16  provided for in board rule. 
 20.17     Subd. 9.  [COOPERATIVE AUDITING ORGANIZATION.] Any 
 20.18  cooperative auditing organization organized under chapter 308A 
 20.19  is qualified for a cooperative auditing service license and may 
 20.20  style itself as a licensed cooperative auditing service if: 
 20.21     (1) for a minimum of one year prior to July 1, 1979, it 
 20.22  rendered auditing or accounting of business analysis services to 
 20.23  its members only; and 
 20.24     (2) its managers in charge of offices maintained in this 
 20.25  state are certified public accountants of this state.  
 20.26     Cooperative auditing services shall comply with all 
 20.27  requirements imposed on CPA firms and the board's rules 
 20.28  governing firms. 
 20.29     Sec. 8.  [326A.06] [LICENSED PUBLIC ACCOUNTANTS AND 
 20.30  REGISTERED ACCOUNTING PRACTITIONERS.] 
 20.31     (a) All licensed public accountants (LPA) who are actively 
 20.32  licensed by the state board on December 31, 2002, shall be 
 20.33  issued a certified public accountant certificate as designed by 
 20.34  the board for this purpose.  LPA's are those accountants who 
 20.35  were eligible for licensure on July 1, 1979, under the law in 
 20.36  effect on that date and who were issued a license as a licensed 
 21.1   public accountant by the board at that time. 
 21.2      (b) By July 1, 2004, the board shall implement a voluntary 
 21.3   registration of accounting practitioners.  The board shall 
 21.4   prescribe by rule the limitations of practice, educational 
 21.5   preparation, examination, registration, fees, peer review, and 
 21.6   continuing education requirements for the registration.  The 
 21.7   board shall consult with the University of Minnesota, the 
 21.8   Minnesota state colleges and universities, the Minnesota 
 21.9   association of private post-secondary schools, the private 
 21.10  college council, the Minnesota association of public 
 21.11  accountants, and other organizations as appropriate in the 
 21.12  implementation of this section. 
 21.13     Sec. 9.  [326A.07] [APPOINTMENT OF SECRETARY OF STATE AS 
 21.14  AGENT.] 
 21.15     Application by a person or a firm not a resident of this 
 21.16  state for a certificate or a permit shall constitute appointment 
 21.17  of the secretary of state as the applicant's agent upon whom 
 21.18  process may be served in any action or proceeding against the 
 21.19  applicant arising out of any transaction or operation connected 
 21.20  with or incidental to services performed by the applicant while 
 21.21  a licensee within this state. 
 21.22     Sec. 10.  [326A.08] [ENFORCEMENT.] 
 21.23     Subdivision 1.  [BASIS FOR CONDUCTING INVESTIGATIONS.] If 
 21.24  the board, or the complaint committee if authorized by the 
 21.25  board, has a reasonable basis to believe that a person or firm 
 21.26  has engaged in or is about to engage in a violation of a 
 21.27  statute, rule, or order that the board has issued or is 
 21.28  empowered to enforce, the board, or the complaint committee if 
 21.29  authorized by the board, may proceed as described in this 
 21.30  section.  The board may, upon receipt of a complaint or other 
 21.31  information suggesting violations of this chapter or of the 
 21.32  rules of the board, conduct investigations to determine whether 
 21.33  there is reasonable basis to institute proceedings under this 
 21.34  section against any person or firm for such violations.  The 
 21.35  investigation is not a prerequisite to such proceedings in the 
 21.36  event that a determination can be made without investigation. 
 22.1      Subd. 2.  [HEARINGS CONDUCTED UNDER CHAPTER 14.] Except as 
 22.2   otherwise described in this section, all hearings shall be 
 22.3   conducted in accordance with chapter 14. 
 22.4      Subd. 3.  [LEGAL ACTION.] (a) When necessary to prevent an 
 22.5   imminent violation of a statute, rule, or order that the board 
 22.6   has issued or is empowered to enforce, the board, or the 
 22.7   complaint committee if authorized by the board, may bring an 
 22.8   action in the name of the state in the district court in Ramsey 
 22.9   county, when necessary to prevent imminent harm to the public, 
 22.10  or in any county in which jurisdiction is proper to enjoin the 
 22.11  act or practice and to enforce compliance with the statute, 
 22.12  rule, or order.  Upon a showing that a person or firm has 
 22.13  engaged in or is about to engage in an act or practice 
 22.14  constituting a violation of a statute, rule, or order that the 
 22.15  board has issued or is empowered to enforce, a permanent or 
 22.16  temporary injunction, restraining order, or other appropriate 
 22.17  relief shall be granted. 
 22.18     (b) For purposes of injunctive relief under this 
 22.19  subdivision, irreparable harm exists when the board shows that a 
 22.20  person or firm has engaged in or is about to engage in an act or 
 22.21  practice constituting a violation of a statute, rule, or order 
 22.22  that the board has issued or is empowered to enforce. 
 22.23     (c) Injunctive relief granted under paragraph (a) does not 
 22.24  relieve an enjoined person or firm from criminal prosecution 
 22.25  from a competent authority or from action by the board pursuant 
 22.26  to subdivisions 4 to 7 with respect to the person's or firm's 
 22.27  certificate, permit, registration, or practice privileges 
 22.28  granted under section 326A.14 or application for examination, 
 22.29  certificate, registration, permit, or renewal or notification 
 22.30  for practice privileges granted under section 326A.14. 
 22.31     Subd. 4.  [CEASE AND DESIST ORDERS.] (a) The board, or the 
 22.32  complaint committee if authorized by the board, may issue and 
 22.33  have served upon a certificate holder, a permit holder, a 
 22.34  registration holder, a person with practice privileges granted 
 22.35  under section 326A.14 who has previously been subject to a 
 22.36  disciplinary order by the board, or an unlicensed firm or person 
 23.1   an order requiring the person or firm to cease and desist from 
 23.2   the act or practice constituting a violation of the statute, 
 23.3   rule, or order.  The order must be calculated to give reasonable 
 23.4   notice of the rights of the person or firm to request a hearing 
 23.5   and must state the reasons for the entry of the order.  No order 
 23.6   may be issued until an investigation of the facts has been 
 23.7   conducted pursuant to section 214.10. 
 23.8      (b) Service of the order is effective when the order is 
 23.9   served on the person, firm, or counsel of record personally, or 
 23.10  by certified mail to the most recent address provided to the 
 23.11  board for the person, firm, or counsel of record. 
 23.12     (c) Unless otherwise agreed by the board, or the complaint 
 23.13  committee if authorized by the board, and the person or firm 
 23.14  requesting the hearing, the hearing must be held no later than 
 23.15  30 days after the request for the hearing is received by the 
 23.16  board. 
 23.17     (d) The administrative law judge shall issue a report 
 23.18  within 30 days of the close of the contested case hearing 
 23.19  record, notwithstanding Minnesota Rules, part 1400.8100, subpart 
 23.20  3.  Within 30 days after receiving the report and any exceptions 
 23.21  to it, the board shall issue a further order vacating, 
 23.22  modifying, or making permanent the cease and desist orders as 
 23.23  the facts require. 
 23.24     (e) If no hearing is requested within 30 days of service of 
 23.25  the order, the order becomes final and remains in effect until 
 23.26  it is modified or vacated by the board. 
 23.27     (f) If the person or firm to whom a cease and desist order 
 23.28  is issued fails to appear at the hearing after being duly 
 23.29  notified, the person or firm is in default and the proceeding 
 23.30  may be determined against that person or firm upon consideration 
 23.31  of the cease and desist order, the allegations of which may be 
 23.32  considered to be true. 
 23.33     (g) In lieu of or in addition to the order provided in 
 23.34  paragraph (a), the board may require the person or firm to 
 23.35  provide to the board a true and complete list of the person's or 
 23.36  firm's clientele so that they can, if deemed necessary, be 
 24.1   notified of the board's action.  Failure to do so, or to provide 
 24.2   an incomplete or inaccurate list, is an act discreditable. 
 24.3      Subd. 5.  [ACTIONS AGAINST PERSONS OR FIRMS.] (a) The board 
 24.4   may, by order, deny, refuse to renew, suspend, temporarily 
 24.5   suspend, or revoke the application, or practice privileges, 
 24.6   registration or certificate of a person or firm; censure or 
 24.7   reprimand the person or firm; prohibit the person or firm from 
 24.8   preparing tax returns or reporting on financial statements; 
 24.9   refuse to permit a person to sit for examination; or refuse to 
 24.10  release the person's examination grades if the board finds that 
 24.11  the order is in the public interest and that, based on a 
 24.12  preponderance of the evidence presented, the person or firm: 
 24.13     (1) has violated a statute, rule, or order that the board 
 24.14  has issued or is empowered to enforce; 
 24.15     (2) has engaged in conduct or acts that are fraudulent, 
 24.16  deceptive, or dishonest whether or not the conduct or acts 
 24.17  relate to performing or offering to perform professional 
 24.18  services, providing that the fraudulent, deceptive, or dishonest 
 24.19  conduct or acts reflect adversely on the person's or firm's 
 24.20  ability or fitness to provide professional services; 
 24.21     (3) has engaged in conduct or acts that are negligent or 
 24.22  otherwise in violation of the standards established by board 
 24.23  rule, where the conduct or acts relate to providing professional 
 24.24  services; 
 24.25     (4) has been convicted of, has pled guilty or nolo 
 24.26  contendere to or has been sentenced as a result of the 
 24.27  commission of a felony or crime, an element of which is 
 24.28  dishonesty or fraud; has been shown to have or admitted to 
 24.29  having engaged in acts or practices tending to show that the 
 24.30  person or firm is incompetent; or has engaged in conduct 
 24.31  reflecting adversely on the person's or firm's ability or 
 24.32  fitness to provide professional services, whether or not a plea 
 24.33  was entered or withheld; 
 24.34     (5) employed fraud or deception in obtaining a certificate, 
 24.35  permit, registration, practice privileges, renewal, or 
 24.36  reinstatement or in passing all or a portion of the examination; 
 25.1      (6) has had the person's or firm's permit, registration, 
 25.2   practice privileges, certificate, right to examine, or other 
 25.3   similar authority revoked, suspended, canceled, limited, or not 
 25.4   renewed for cause, or has committed unprofessional acts for 
 25.5   which the person or firm was otherwise disciplined or 
 25.6   sanctioned, including, but not limited to, being ordered to or 
 25.7   agreeing to cease and desist from prescribed conduct, in any 
 25.8   state or any foreign country; 
 25.9      (7) has had the person's or firm's right to practice before 
 25.10  any federal, state, or other government agency revoked, 
 25.11  suspended, canceled, limited, or not renewed for cause, or has 
 25.12  committed unprofessional acts for which the person or firm was 
 25.13  otherwise disciplined or sanctioned, including, but not limited 
 25.14  to, being ordered to or agreeing to cease and desist from 
 25.15  prescribed conduct; 
 25.16     (8) failed to meet any requirement for the issuance or 
 25.17  renewal of the person's or firm's certificate, registration or 
 25.18  permit, or for practice privileges; 
 25.19     (9) with respect to temporary suspension orders, has 
 25.20  committed an act, engaged in conduct, or committed practices 
 25.21  that may result or may have resulted, in the opinion of the 
 25.22  board or the complaint committee if authorized by the board, in 
 25.23  an immediate threat to the public; or 
 25.24     (10) has engaged in any conduct reflecting adversely upon 
 25.25  the person's or firm's fitness to perform services while a 
 25.26  licensee, individual granted privileges under section 326A.14, 
 25.27  or a person registered under section 326A.06, paragraph (b). 
 25.28     (b) In lieu of or in addition to any remedy provided in 
 25.29  paragraph (a), the board may require, as a condition of 
 25.30  continued possession of a certificate, a registration or 
 25.31  practice privileges, termination of suspension, reinstatement of 
 25.32  permit, registration of a person or firm or of practice 
 25.33  privileges under section 326A.14, a certificate, an examination, 
 25.34  or release of examination grades, that the person or firm: 
 25.35     (1) submit to a peer review of the person's or firm's 
 25.36  ability, skills, or quality of work, conducted in a fashion and 
 26.1   by persons, entity, or entities as required by the board; and 
 26.2      (2) complete to the satisfaction of the board continuing 
 26.3   professional education courses specified by the board. 
 26.4      (c) Service of the order is effective if the order is 
 26.5   served on the person, firm, or counsel of record personally or 
 26.6   by certified mail to the most recent address provided to the 
 26.7   board for the person, firm, or counsel of record.  The order 
 26.8   shall state the reasons for the entry of the order. 
 26.9      (d) All hearings required by this subdivision must be 
 26.10  conducted in accordance with chapter 14 except with respect to 
 26.11  temporary suspension orders as provided for in subdivision 6. 
 26.12     (e) In addition to the remedies authorized by this 
 26.13  subdivision, the board may enter into an agreement with the 
 26.14  person or firm for corrective action and may unilaterally issue 
 26.15  a warning to a person or firm. 
 26.16     (f) The board shall not use agreements for corrective 
 26.17  action or warnings in any situation where the person or firm has 
 26.18  been convicted of or pled guilty or nolo contendere to a felony 
 26.19  or crime and the felony or crime is the basis of the board's 
 26.20  action against the person or firm, where the conduct of the 
 26.21  person or firm indicates a pattern of related violations of 
 26.22  paragraph (a) or the rules of the board, or where the board 
 26.23  concludes that the conduct of the person or firm will not be 
 26.24  deterred other than by disciplinary action under this 
 26.25  subdivision or subdivision 4 or 6. 
 26.26     (g) Agreements for corrective action may be used by the 
 26.27  board, or the complaint committee if authorized by the board, 
 26.28  where the violation committed by the person or firm does not 
 26.29  warrant disciplinary action pursuant to this subdivision or 
 26.30  subdivision 4 or 6, but where the board, or the complaint 
 26.31  committee if authorized by the board, determines that corrective 
 26.32  action is required to prevent further such violations and to 
 26.33  otherwise protect the public.  Warnings may be used by the 
 26.34  board, or the complaint committee if authorized by the board, 
 26.35  where the violation of the person or firm is de minimus, does 
 26.36  not warrant disciplinary action under this subdivision or 
 27.1   subdivision 4 or 6, and does not require corrective action to 
 27.2   protect the public. 
 27.3      (h) Agreements for corrective action must not be considered 
 27.4   disciplinary action against the person's or firm's application, 
 27.5   permit, registration or certificate, or practice privileges 
 27.6   under section 326A.14.  However, agreements for corrective 
 27.7   action are public data.  Warnings must not be considered 
 27.8   disciplinary action against the person's or firm's application, 
 27.9   permit, registration, or certificate or person's practice 
 27.10  privileges and are private data. 
 27.11     Subd. 6.  [PROCEDURE FOR TEMPORARY SUSPENSION OF PERMIT, 
 27.12  REGISTRATION, OR CERTIFICATE OR PRACTICE PRIVILEGES.] (a) When 
 27.13  the board, or the complaint committee if authorized by the 
 27.14  board, issues a temporary suspension order, the suspension is in 
 27.15  effect upon service of a written order on the person, firm, or 
 27.16  counsel of record, specifying the statute, rule, or order 
 27.17  violated.  The order remains in effect until the board issues a 
 27.18  final order in the matter after a hearing or upon agreement 
 27.19  between the board and the person or firm. 
 27.20     (b) The order may prohibit the person or firm from 
 27.21  providing professional services in whole or in part, as the 
 27.22  facts may require, and may condition the end of such suspension 
 27.23  on compliance with a statute, rule, or order that the board has 
 27.24  issued or is empowered to enforce. 
 27.25     (c) The order must set forth the rights to hearing 
 27.26  contained in this section and must state the reasons for the 
 27.27  entry of order.  
 27.28     (d) Within ten days after service of the order, the person 
 27.29  or firm may request a hearing in writing.  The board shall hold 
 27.30  a hearing before its own members within five working days of a 
 27.31  receipt of a request for hearing or within five working days of 
 27.32  receipt of a request for hearing on the sole issue of whether 
 27.33  there is a reasonable basis to continue, modify, or lift the 
 27.34  temporary suspension.  This hearing is not subject to chapter 
 27.35  14.  Evidence presented by the board or the person or firm shall 
 27.36  be in affidavit form only.  The person, firm, or counsel of 
 28.1   record may appear for oral argument. 
 28.2      (e) Within five working days after the hearing, the board 
 28.3   shall issue its order and, if the suspension is continued, 
 28.4   schedule a contested case hearing within 30 days after issuance 
 28.5   of the order.  The administrative law judge shall issue a report 
 28.6   within 30 days after closing of the contested case hearing 
 28.7   record, notwithstanding the provisions of Minnesota Rules, part 
 28.8   1400.8100, subpart 3.  The board shall issue a final order 
 28.9   within 30 days after receipt of that report. 
 28.10     Subd. 7.  [VIOLATION; PENALTIES; COSTS OF PROCEEDING.] (a) 
 28.11  The board may impose a civil penalty not to exceed $2,000 per 
 28.12  violation upon a person or firm that violates an order, statute, 
 28.13  or rule that the board has issued or is empowered to enforce. 
 28.14     (b) The board may, in addition, impose a fee to reimburse 
 28.15  the board for all or part of the cost of the proceedings, 
 28.16  including reasonable investigative costs, resulting in 
 28.17  disciplinary or corrective action authorized by this section, 
 28.18  the imposition of civil penalties, or the issuance of a cease 
 28.19  and desist order.  The fee may be imposed when the board shows 
 28.20  that the position of the person or firm that violates a statute, 
 28.21  rule, or order that the board has issued or is empowered to 
 28.22  enforce is not substantially justified, unless special 
 28.23  circumstances make an award unjust, notwithstanding the 
 28.24  provisions of Minnesota Rules, part 1400.8401.  The costs 
 28.25  include, but are not limited to, the amount paid by the board 
 28.26  for services from the office of administrative hearings, 
 28.27  attorney and reasonable investigative fees, court reporters, 
 28.28  witnesses, reproduction of records, board members' per diem 
 28.29  compensation, board staff time, and expense incurred by board 
 28.30  members and staff. 
 28.31     (c) All hearings required by this subdivision must be 
 28.32  conducted in accordance with chapter 14. 
 28.33     Subd. 8.  [PERSONS AND ENTITIES SUBJECT TO DISCIPLINE.] Any 
 28.34  person or entity who prepares or reports on financial statements 
 28.35  or schedules for a client for a fee is subject to this section 
 28.36  and the practice of the person or entity may be disciplined by 
 29.1   the boards as provided for in this section.  The board may 
 29.2   discipline a person or entity based on violations of this 
 29.3   chapter, the board's rules, or misrepresentations made by the 
 29.4   person or entity regarding the work the person or entity 
 29.5   performed. 
 29.6      Subd. 9.  [NOTIFICATION OF OTHER STATES.] In any case where 
 29.7   the board renders a decision imposing discipline against a 
 29.8   person or firm, the board shall examine its records to determine 
 29.9   whether the person or firm holds a certificate or a permit in 
 29.10  any other state.  If so, the board shall notify the board of 
 29.11  accountancy of the other state of its decision, by mail, within 
 29.12  45 days of the decision becoming final.  
 29.13     Sec. 11.  [326A.09] [REINSTATEMENT.] 
 29.14     The board may reinstate a suspended, revoked, or 
 29.15  surrendered certificate, registration, or permit or suspended, 
 29.16  revoked, or surrendered practice privileges upon petition of the 
 29.17  person or firm holding or formerly holding the registration, 
 29.18  permit, or certificate, or practice privileges.  The board may, 
 29.19  in its sole discretion, require that the person or firm submit 
 29.20  to the board evidence of having obtained up to 120 hours of 
 29.21  continuing professional education credits that would have been 
 29.22  required had the person or firm held a registration, 
 29.23  certificate, permit, or practice privileges continuously.  The 
 29.24  board may, in its sole discretion, place any other conditions 
 29.25  upon reinstatement of a suspended, revoked, or surrendered 
 29.26  certificate, permit, registration, or of practice privileges 
 29.27  that it finds appropriate and necessary to ensure that the 
 29.28  purposes of this chapter are met.  No suspended certificate, 
 29.29  registration, permit, or practice privileges may be reinstated 
 29.30  until the former holder, or person with practice privileges has 
 29.31  completed one-half of the suspension. 
 29.32     Sec. 12.  [326A.10] [UNLAWFUL ACTS.] 
 29.33     (a) Only a licensee may issue a report on financial 
 29.34  statements of any person, firm, organization, or governmental 
 29.35  unit that results from providing attest services, or offer to 
 29.36  render or render any attest service.  Only a certified public 
 30.1   accountant, a CPA firm, or, to the extent permitted by board 
 30.2   rule, a person registered under section 326A.06, paragraph (b), 
 30.3   may issue a report on financial statements of any person, firm, 
 30.4   organization, or governmental unit that results from providing 
 30.5   compilation services or offer to render or render any 
 30.6   compilation service.  These restrictions do not prohibit any act 
 30.7   of a public official or public employee in the performance of 
 30.8   that person's duties or prohibit the performance by any 
 30.9   nonlicensee of other services involving the use of accounting 
 30.10  skills, including the preparation of tax returns, management 
 30.11  advisory services, and the preparation of financial statements 
 30.12  without the issuance of reports on them.  Nonlicensees may 
 30.13  prepare financial statements and issue nonattest transmittals or 
 30.14  information on them which do not purport to be in compliance 
 30.15  with the Statements on Standards for Accounting and Review 
 30.16  Services (SSARS).  Nonlicensees registered under section 
 30.17  326A.06, paragraph (b), may, to the extent permitted by board 
 30.18  rule, prepare financial statements and issue nonattest 
 30.19  transmittals or information on them. 
 30.20     (b) Licensees performing attest or compilation services 
 30.21  must provide those services in accordance with professional 
 30.22  standards.  To the extent permitted by board rule, registered 
 30.23  accounting practitioners performing compilation services must 
 30.24  provide those services in accordance with standards specified in 
 30.25  board rule. 
 30.26     (c) A person who does not hold a valid certificate issued 
 30.27  under section 326A.04 shall not use or assume the title 
 30.28  "certified public accountant," the abbreviation "CPA," or any 
 30.29  other title, designation, words, letters, abbreviation, sign, 
 30.30  card, or device tending to indicate that the person is a 
 30.31  certified public accountant. 
 30.32     (d) A firm shall not provide attest services or assume or 
 30.33  use the title "certified public accountants," the abbreviation 
 30.34  "CPAs," or any other title, designation, words, letters, 
 30.35  abbreviation, sign, card, or device tending to indicate that the 
 30.36  firm is a CPA firm unless (1) the firm holds a valid permit 
 31.1   issued under section 326A.05, and (2) ownership of the firm is 
 31.2   in accordance with this chapter and rules adopted by the board. 
 31.3      (e) A person or firm that does not hold a valid certificate 
 31.4   or permit issued under section 326A.04 or 326A.05 shall not 
 31.5   assume or use the title "certified accountant," "chartered 
 31.6   accountant," "enrolled accountant," "licensed accountant," 
 31.7   "registered accountant," "accredited accountant," "accounting 
 31.8   practitioner," "public accountant," "licensed public 
 31.9   accountant," or any other title or designation likely to be 
 31.10  confused with the title "certified public accountant," or use 
 31.11  any of the abbreviations "CA," "LA," "RA," "AA," "PA," "AP," 
 31.12  "LPA," or similar abbreviation likely to be confused with the 
 31.13  abbreviation "CPA."  The title "enrolled agent" or "EA" may only 
 31.14  be used by individuals so designated by the Internal Revenue 
 31.15  Service. 
 31.16     (f) Persons registered under section 326A.06, paragraph 
 31.17  (b), may use the title "registered accounting practitioner" or 
 31.18  the abbreviation "RAP."  A person who does not hold a valid 
 31.19  registration under section 326A.06, paragraph (b), shall not 
 31.20  assume or use such title or abbreviation. 
 31.21     (g) Except to the extent permitted in paragraph (a), 
 31.22  nonlicensees may not use language in any statement relating to 
 31.23  the financial affairs of a person or entity that is 
 31.24  conventionally used by licensees in reports on financial 
 31.25  statements.  In this regard, the board shall issue by rule safe 
 31.26  harbor language that nonlicensees may use in connection with 
 31.27  such financial information.  A person or firm that does not hold 
 31.28  a valid certificate or permit, or a registration issued under 
 31.29  section 326A.04, 326A.05, or 326A.06, paragraph (b), shall not 
 31.30  assume or use any title or designation that includes the word 
 31.31  "accountant" or "accounting" in connection with any other 
 31.32  language, including the language of a report, that implies that 
 31.33  the person or firm holds such a certificate, permit, or 
 31.34  registration or has special competence as an accountant.  A 
 31.35  person or firm that does not hold a valid certificate or permit 
 31.36  issued under section 326A.04 or 326A.05 shall not assume or use 
 32.1   any title or designation that includes the word "auditor" in 
 32.2   connection with any other language, including the language of a 
 32.3   report, that implies that the person or firm holds such a 
 32.4   certificate or permit or has special competence as an auditor.  
 32.5   However, this paragraph does not prohibit any officer, partner, 
 32.6   member, manager, or employee of any firm or organization from 
 32.7   affixing that person's own signature to any statement in 
 32.8   reference to the financial affairs of such firm or organization 
 32.9   with any wording designating the position, title, or office that 
 32.10  the person holds, nor prohibit any act of a public official or 
 32.11  employee in the performance of the person's duties as such. 
 32.12     (h) No person holding a certificate or registration or firm 
 32.13  holding a permit under this chapter shall use a professional or 
 32.14  firm name or designation that is misleading about the legal form 
 32.15  of the firm, or about the persons who are partners, officers, 
 32.16  members, managers, or shareholders of the firm, or about any 
 32.17  other matter.  However, names of one or more former partners, 
 32.18  members, managers, or shareholders may be included in the name 
 32.19  of a firm or its successor. 
 32.20     (i) Paragraphs (a) to (h) do not apply to a person or firm 
 32.21  holding a certification, designation, degree, or license granted 
 32.22  in a foreign country entitling the holder to engage in the 
 32.23  practice of public accountancy or its equivalent in that 
 32.24  country, if: 
 32.25     (1) the activities of the person or firm in this state are 
 32.26  limited to the provision of professional services to persons or 
 32.27  firms who are residents of, governments of, or business entities 
 32.28  of the country in which the person holds the entitlement; 
 32.29     (2) the person or firm performs no attest or compilation 
 32.30  services and issues no reports with respect to the financial 
 32.31  statements of any other persons, firms, or governmental units in 
 32.32  this state; and 
 32.33     (3) the person or firm does not use in this state any title 
 32.34  or designation other than the one under which the person 
 32.35  practices in the foreign country, followed by a translation of 
 32.36  the title or designation into English, if it is in a different 
 33.1   language, and by the name of the country. 
 33.2      (j) No holder of a certificate issued under section 326A.04 
 33.3   may perform attest services through any business form that does 
 33.4   not hold a valid permit issued under section 326A.05. 
 33.5      (k) No individual licensee may issue a report in standard 
 33.6   form upon a compilation of financial information through any 
 33.7   form of business that does not hold a valid permit issued under 
 33.8   section 326A.05, unless the report discloses the name of the 
 33.9   business through which the individual is issuing the report, and 
 33.10  the individual: 
 33.11     (1) signs the compilation report identifying the individual 
 33.12  as a certified public accountant; 
 33.13     (2) meets the competency requirement provided in applicable 
 33.14  standards; and 
 33.15     (3) undergoes no less frequently than once every three 
 33.16  years, a peer review conducted in a manner specified by the 
 33.17  board in rule, and the review includes verification that the 
 33.18  individual has met the competency requirements set out in 
 33.19  professional standards for such services. 
 33.20     (l) No person registered under section 326A.06, paragraph 
 33.21  (b), may issue a report in standard form upon a compilation of 
 33.22  financial information unless the board by rule permits the 
 33.23  report and the person:  
 33.24     (1) signs the compilation report identifying the individual 
 33.25  as a registered accounting practitioner; 
 33.26     (2) meets the competency requirements in board rule; and 
 33.27     (3) undergoes no less frequently than once every three 
 33.28  years a peer review conducted in a manner specified by the board 
 33.29  in rule, and the review includes verification that the 
 33.30  individual has met the competency requirements in board rule. 
 33.31     (m) Nothing in this section prohibits a practicing attorney 
 33.32  or firm of attorneys from preparing or presenting records or 
 33.33  documents customarily prepared by an attorney or firm of 
 33.34  attorneys in connection with the attorney's professional work in 
 33.35  the practice of law. 
 33.36     (n) Notwithstanding other provisions of this section, 
 34.1   persons preparing unaudited financial statements under 
 34.2   corresponding provisions of prior law shall be permitted to 
 34.3   perform compilation services until six months after the board 
 34.4   adopts rules under section 326A.06. 
 34.5      Sec. 13.  [326A.11] [SINGLE ACT EVIDENCE OF PRACTICE.] 
 34.6      In any action brought under section 326A.08, evidence of 
 34.7   the commission of a single act prohibited by this chapter is 
 34.8   sufficient to justify a penalty, injunction, restraining order, 
 34.9   or conviction, respectively, without evidence of a general 
 34.10  course of conduct. 
 34.11     Sec. 14.  [326A.12] [CONFIDENTIAL COMMUNICATIONS.] 
 34.12     (a) Except by permission of the client for whom a licensee 
 34.13  performs services or the heirs, successors, or personal 
 34.14  representatives of the client, a licensee shall not voluntarily 
 34.15  disclose information communicated to the licensee by the client 
 34.16  relating to and in connection with services rendered to the 
 34.17  client by the licensee.  Nothing in this section may be 
 34.18  construed to prohibit: 
 34.19     (1) the disclosure of information required to be disclosed 
 34.20  by the standards of the public accounting profession in 
 34.21  reporting on the examination of financial statements; or 
 34.22     (2) disclosures in court proceedings, in investigations or 
 34.23  proceedings under section 326A.08, in ethical investigations 
 34.24  conducted by private professional organizations, in the course 
 34.25  of peer reviews, to other persons active in the organization 
 34.26  performing services for that client on a need-to-know basis, or 
 34.27  to persons in the entity who need this information for the sole 
 34.28  purpose of assuring quality control. 
 34.29     (b) This section also applies to persons registered under 
 34.30  section 326A.06, paragraph (b). 
 34.31     Sec. 15.  [326A.13] [WORKING PAPERS; CLIENTS' RECORDS.] 
 34.32     (a) Subject to the provisions of section 326A.12, all 
 34.33  statements, records, schedules, working papers, and memoranda 
 34.34  made by a licensee or a partner, shareholder, officer, director, 
 34.35  member, manager, or employee of a licensee, incident to, or in 
 34.36  the course of, rendering services to a client while a licensee, 
 35.1   except the reports submitted by the licensee to the client and 
 35.2   except for records that are part of the client's records, remain 
 35.3   the property of the licensee in the absence of an express 
 35.4   agreement between the licensee and the client to the contrary.  
 35.5   No statement, record, schedule, working paper, or memorandum may 
 35.6   be sold, transferred, or bequeathed, without the consent of the 
 35.7   client or the client's personal representative or assignee, to 
 35.8   anyone other than one or more surviving partners, stockholders, 
 35.9   members or new partners, new stockholders, new members of the 
 35.10  licensee, or any combined or merged firm or successor in 
 35.11  interest to the licensee.  Nothing in this section may be 
 35.12  construed as prohibiting any temporary transfer of workpapers or 
 35.13  other material necessary in the course of carrying out peer 
 35.14  reviews or as otherwise interfering with the disclosure of 
 35.15  information pursuant to section 326A.12. 
 35.16     (b) A licensee shall furnish to a client or former client, 
 35.17  upon request and reasonable notice: 
 35.18     (1) a copy of the licensee's working papers, to the extent 
 35.19  that the working papers include records that would ordinarily 
 35.20  constitute part of the client's records and are not otherwise 
 35.21  available to the client; and 
 35.22     (2) any accounting or other records belonging to, or 
 35.23  obtained from or on behalf of, the client that the licensee 
 35.24  removed from the client's premises or received for the client's 
 35.25  account.  The licensee may make and retain copies of such 
 35.26  documents of the client when they form the basis for work done 
 35.27  by the licensee. 
 35.28     (c) Nothing in this section requires a licensee to keep any 
 35.29  work paper beyond the period prescribed in any other applicable 
 35.30  statute. 
 35.31     (d) This section also applies to persons registered under 
 35.32  section 326A.06, paragraph (b). 
 35.33     Sec. 16.  [326A.14] [SUBSTANTIAL EQUIVALENCY.] 
 35.34     Subdivision 1.  [REQUIREMENTS.] (a) An individual whose 
 35.35  principal place of business is not in this state and who has a 
 35.36  valid certificate or license as a certified public accountant 
 36.1   from any state which, upon verification, is in substantial 
 36.2   equivalence with the certified public accountant licensure 
 36.3   requirements of this chapter shall be presumed to have 
 36.4   qualifications substantially equivalent to this state's 
 36.5   requirements and shall have all the privileges of certificate 
 36.6   holders and licensees of this state without the need to obtain a 
 36.7   certificate or permit.  However, such individuals shall notify 
 36.8   the board of their intent to enter the state under this 
 36.9   provision as provided for in board rule and pay the required fee.
 36.10     (b) An individual whose principal place of business is not 
 36.11  in this state and who has a valid certificate or license as a 
 36.12  certified public accountant from any state whose certified 
 36.13  public accountant licensure qualifications, upon verification, 
 36.14  are not substantially equivalent with the licensure requirements 
 36.15  of this chapter shall be presumed to have qualifications 
 36.16  substantially equivalent to this state's requirements and shall 
 36.17  have all the privileges of certificate holders and licensees of 
 36.18  this state without the need to obtain a certificate or permit if 
 36.19  the individual obtains verification, as specified in board rule, 
 36.20  that the individual's qualifications are substantially 
 36.21  equivalent to the licensure requirements of this chapter.  Such 
 36.22  individuals shall notify the board of their intent to enter the 
 36.23  state under this provision as provided for in board rule and pay 
 36.24  the required fee. 
 36.25     (c) Any licensee of another state exercising the privilege 
 36.26  afforded under this section consents, as a condition of the 
 36.27  grant of this privilege: 
 36.28     (1) to the personal and subject matter jurisdiction and 
 36.29  disciplinary authority of the board; 
 36.30     (2) to comply with this chapter and the board's rules; and 
 36.31     (3) to the appointment of the state board that issued the 
 36.32  license as the licensee's agent upon whom process may be served 
 36.33  in any action or proceeding by this board against the licensee.  
 36.34     Subd. 2.  [USE OF TITLE IN ANOTHER STATE.] A licensee of 
 36.35  this state offering or rendering services or using the CPA title 
 36.36  in another state is subject to the same disciplinary action in 
 37.1   this state for which the licensee would be subject to discipline 
 37.2   for an act committed in the other state.  The board shall 
 37.3   investigate any complaint made by the board of accountancy of 
 37.4   another state. 
 37.5      Sec. 17.  [TRANSITIONAL PROVISIONS FOR BOARD MEMBERS.] 
 37.6      Notwithstanding Minnesota Statutes, section 326A.02, 
 37.7   members of the board of accountancy who were appointed to the 
 37.8   board prior to January 1, 2003, may complete their terms.  
 37.9   Appointments made on or after January 1, 2003, are governed by 
 37.10  Minnesota Statutes, section 326A.02. 
 37.11     Sec. 18.  [REPEALER.] 
 37.12     Minnesota Statutes 2000, sections 326.165; 326.1655; 
 37.13  326.17; 326.18; 326.19; 326.191; 326.192; 326.197; 326.20; 
 37.14  326.201; 326.21; 326.211; 326.212; 326.22; 326.223; 326.224; 
 37.15  326.225; 326.228; and 326.229, are repealed. 
 37.16     Sec. 19.  [EFFECTIVE DATE.] 
 37.17     This article is effective January 1, 2003. 
 37.18                             ARTICLE 2 
 37.19                         CONFORMING CHANGES 
 37.20     Section 1.  Minnesota Statutes 2000, section 3.972, 
 37.21  subdivision 1, is amended to read: 
 37.22     Subdivision 1.  [PUBLIC ACCOUNTANT.] For the purposes of 
 37.23  this section, "public accountant" means a certified public 
 37.24  accountant, or certified public accounting firm, or a licensed 
 37.25  public accountant licensed by the board of accountancy 
 37.26  under sections 326.17 to 326.229 chapter 326A.  
 37.27     Sec. 2.  Minnesota Statutes 2000, section 116J.70, 
 37.28  subdivision 2a, is amended to read: 
 37.29     Subd. 2a.  [LICENSE; EXCEPTIONS.] "Business license" or 
 37.30  "license" does not include the following:  
 37.31     (1) any occupational license or registration issued by a 
 37.32  licensing board listed in section 214.01 or any occupational 
 37.33  registration issued by the commissioner of health pursuant to 
 37.34  section 214.13; 
 37.35     (2) any license issued by a county, home rule charter city, 
 37.36  statutory city, township, or other political subdivision; 
 38.1      (3) any license required to practice the following 
 38.2   occupation regulated by the following sections:  
 38.3      (i) abstracters regulated pursuant to chapter 386; 
 38.4      (ii) accountants regulated pursuant to chapter 326 326A; 
 38.5      (iii) adjusters regulated pursuant to chapter 72B; 
 38.6      (iv) architects regulated pursuant to chapter 326; 
 38.7      (v) assessors regulated pursuant to chapter 270; 
 38.8      (vi) athletic trainers regulated pursuant to chapter 148; 
 38.9      (vii) attorneys regulated pursuant to chapter 481; 
 38.10     (viii) auctioneers regulated pursuant to chapter 330; 
 38.11     (ix) barbers regulated pursuant to chapter 154; 
 38.12     (x) beauticians regulated pursuant to chapter 155A; 
 38.13     (xi) boiler operators regulated pursuant to chapter 183; 
 38.14     (xii) chiropractors regulated pursuant to chapter 148; 
 38.15     (xiii) collection agencies regulated pursuant to chapter 
 38.16  332; 
 38.17     (xiv) cosmetologists regulated pursuant to chapter 155A; 
 38.18     (xv) dentists, registered dental assistants, and dental 
 38.19  hygienists regulated pursuant to chapter 150A; 
 38.20     (xvi) detectives regulated pursuant to chapter 326; 
 38.21     (xvii) electricians regulated pursuant to chapter 326; 
 38.22     (xviii) mortuary science practitioners regulated pursuant 
 38.23  to chapter 149A; 
 38.24     (xix) engineers regulated pursuant to chapter 326; 
 38.25     (xx) insurance brokers and salespersons regulated pursuant 
 38.26  to chapter 60A; 
 38.27     (xxi) certified interior designers regulated pursuant to 
 38.28  chapter 326; 
 38.29     (xxii) midwives regulated pursuant to chapter 147D; 
 38.30     (xxiii) nursing home administrators regulated pursuant to 
 38.31  chapter 144A; 
 38.32     (xxiv) optometrists regulated pursuant to chapter 148; 
 38.33     (xxv) osteopathic physicians regulated pursuant to chapter 
 38.34  147; 
 38.35     (xxvi) pharmacists regulated pursuant to chapter 151; 
 38.36     (xxvii) physical therapists regulated pursuant to chapter 
 39.1   148; 
 39.2      (xxviii) physician assistants regulated pursuant to chapter 
 39.3   147A; 
 39.4      (xxix) physicians and surgeons regulated pursuant to 
 39.5   chapter 147; 
 39.6      (xxx) plumbers regulated pursuant to chapter 326; 
 39.7      (xxxi) podiatrists regulated pursuant to chapter 153; 
 39.8      (xxxii) practical nurses regulated pursuant to chapter 148; 
 39.9      (xxxiii) professional fund raisers regulated pursuant to 
 39.10  chapter 309; 
 39.11     (xxxiv) psychologists regulated pursuant to chapter 148; 
 39.12     (xxxv) real estate brokers, salespersons, and others 
 39.13  regulated pursuant to chapters 82 and 83; 
 39.14     (xxxvi) registered nurses regulated pursuant to chapter 
 39.15  148; 
 39.16     (xxxvii) securities brokers, dealers, agents, and 
 39.17  investment advisers regulated pursuant to chapter 80A; 
 39.18     (xxxviii) steamfitters regulated pursuant to chapter 326; 
 39.19     (xxxix) teachers and supervisory and support personnel 
 39.20  regulated pursuant to chapter 125; 
 39.21     (xl) veterinarians regulated pursuant to chapter 156; 
 39.22     (xli) water conditioning contractors and installers 
 39.23  regulated pursuant to chapter 326; 
 39.24     (xlii) water well contractors regulated pursuant to chapter 
 39.25  103I; 
 39.26     (xliii) water and waste treatment operators regulated 
 39.27  pursuant to chapter 115; 
 39.28     (xliv) motor carriers regulated pursuant to chapter 221; 
 39.29     (xlv) professional firms regulated under chapter 319B; 
 39.30     (xlvi) real estate appraisers regulated pursuant to chapter 
 39.31  82B; 
 39.32     (xlvii) residential building contractors, residential 
 39.33  remodelers, residential roofers, manufactured home installers, 
 39.34  and specialty contractors regulated pursuant to chapter 326; 
 39.35     (4) any driver's license required pursuant to chapter 171; 
 39.36     (5) any aircraft license required pursuant to chapter 360; 
 40.1      (6) any watercraft license required pursuant to chapter 
 40.2   86B; 
 40.3      (7) any license, permit, registration, certification, or 
 40.4   other approval pertaining to a regulatory or management program 
 40.5   related to the protection, conservation, or use of or 
 40.6   interference with the resources of land, air, or water, which is 
 40.7   required to be obtained from a state agency or instrumentality; 
 40.8   and 
 40.9      (8) any pollution control rule or standard established by 
 40.10  the pollution control agency or any health rule or standard 
 40.11  established by the commissioner of health or any licensing rule 
 40.12  or standard established by the commissioner of human services. 
 40.13     Sec. 3.  Minnesota Statutes 2000, section 214.01, 
 40.14  subdivision 3, is amended to read: 
 40.15     Subd. 3.  [NON-HEALTH-RELATED LICENSING BOARD.] 
 40.16  "Non-health-related licensing board" means the board of teaching 
 40.17  established pursuant to section 122A.07, the board of barber 
 40.18  examiners established pursuant to section 154.22, the board of 
 40.19  assessors established pursuant to section 270.41, the board of 
 40.20  architecture, engineering, land surveying, landscape 
 40.21  architecture, geoscience, and interior design established 
 40.22  pursuant to section 326.04, the board of accountancy established 
 40.23  pursuant to section 326.17, the board of electricity established 
 40.24  pursuant to section 326.241, the private detective and 
 40.25  protective agent licensing board established pursuant to section 
 40.26  326.33, the board of accountancy established pursuant to section 
 40.27  326A.02, the board of boxing established pursuant to section 
 40.28  341.01, and the peace officer standards and training board 
 40.29  established pursuant to section 626.841. 
 40.30     Sec. 4.  Minnesota Statutes 2000, section 319B.02, 
 40.31  subdivision 19, is amended to read: 
 40.32     Subd. 19.  [PROFESSIONAL SERVICES.] "Professional services" 
 40.33  means services of the type required or permitted to be furnished 
 40.34  by a professional under a license, registration, or certificate 
 40.35  issued by the state of Minnesota to practice medicine and 
 40.36  surgery under sections 147.01 to 147.22, as a physician 
 41.1   assistant pursuant to sections 147A.01 to 147A.27, chiropractic 
 41.2   under sections 148.01 to 148.105, registered nursing under 
 41.3   sections 148.171 to 148.285, optometry under sections 148.52 to 
 41.4   148.62, psychology under sections 148.88 to 148.98, dentistry 
 41.5   and dental hygiene under sections 150A.01 to 150A.12, pharmacy 
 41.6   under sections 151.01 to 151.40, podiatric medicine under 
 41.7   sections 153.01 to 153.25, veterinary medicine under sections 
 41.8   156.001 to 156.14, architecture, engineering, surveying, 
 41.9   landscape architecture, geoscience, and certified interior 
 41.10  design under sections 326.02 to 326.15, accountancy 
 41.11  under sections 326.17 to 326.229 chapter 326A, or law under 
 41.12  sections 481.01 to 481.17, or under a license or certificate 
 41.13  issued by another state under similar laws.  Professional 
 41.14  services includes services of the type required to be furnished 
 41.15  by a professional pursuant to a license or other authority to 
 41.16  practice law under the laws of a foreign nation. 
 41.17     Sec. 5.  Minnesota Statutes 2000, section 326.53, is 
 41.18  amended to read: 
 41.19     326.53 [VIOLATIONS; PENALTY PROVISIONS.] 
 41.20     Subdivision 1.  [GENERALLY.] (1) Any violation of the 
 41.21  provisions of sections 326.02 to 326.229 shall be chapter 326A 
 41.22  is a gross misdemeanor. 
 41.23     (2) Every person violating any of the provisions of 
 41.24  sections 326.523 to 326.526, or assisting in such violation, 
 41.25  shall, upon conviction thereof, be punished by a fine not 
 41.26  exceeding $3,000 or, in default of the payment of such fine, by 
 41.27  imprisonment in the county jail for not more than one year.  In 
 41.28  the case of a corporation, the violation of these sections shall 
 41.29  be deemed to be also that of the individual directors, officers, 
 41.30  or agents of such corporation who have assisted in such 
 41.31  violation, or who have authorized, ordered, or done the acts or 
 41.32  omissions constituting, in whole or in part, such violation; 
 41.33  and, upon conviction thereof, any such directors, officers, or 
 41.34  agents shall be punished by fine or imprisonment as herein 
 41.35  provided. 
 41.36     Sec. 6.  Minnesota Statutes 2000, section 367.36, 
 42.1   subdivision 1, is amended to read: 
 42.2      Subdivision 1.  [TRANSITION; AUDIT.] In a town in which 
 42.3   option D is adopted, the incumbent treasurer shall continue in 
 42.4   office until the expiration of the term.  Thereafter the duties 
 42.5   of the treasurer prescribed by law shall be performed by the 
 42.6   clerk who shall be referred to as the clerk-treasurer.  If the 
 42.7   offices of clerk and treasurer are combined and the town's 
 42.8   annual revenue is more than $100,000, the town board shall 
 42.9   provide for an annual audit of the town's financial affairs by 
 42.10  the state auditor or a public accountant in accordance with 
 42.11  minimum audit procedures prescribed by the state auditor.  If 
 42.12  the offices of clerk and treasurer are combined and the town's 
 42.13  annual revenue is $100,000 or less, the town board shall provide 
 42.14  for an audit of the town's financial affairs by the state 
 42.15  auditor or a public accountant in accordance with minimum audit 
 42.16  procedures prescribed by the state auditor at least once every 
 42.17  five years, which audit shall be for a one-year period to be 
 42.18  determined at random by the person conducting the audit.  Upon 
 42.19  completion of an audit by a public accountant, the public 
 42.20  accountant shall forward a copy of the audit to the state 
 42.21  auditor.  For purposes of this subdivision, "public accountant" 
 42.22  means a certified public accountant, or a certified public 
 42.23  accounting firm, or a licensed public accountant, all licensed 
 42.24  by the board of accountancy under sections 326.17 to 326.229 
 42.25  chapter 326A. 
 42.26     Sec. 7.  Minnesota Statutes 2000, section 412.222, is 
 42.27  amended to read: 
 42.28     412.222 [PUBLIC ACCOUNTANTS IN STATUTORY CITIES.] 
 42.29     The council of any city may employ public accountants on a 
 42.30  monthly or yearly basis for the purpose of auditing, examining, 
 42.31  and reporting upon the books and records of account of such 
 42.32  city.  For the purpose of this section, "public accountant" 
 42.33  means a certified public accountant, or a certified public 
 42.34  accounting firm, or a licensed public accountant, all licensed 
 42.35  by the board of accountancy under sections 326.17 to 326.23 
 42.36  chapter 326A.  All expenditures for these purposes shall be 
 43.1   within the statutory limits upon tax levies in such cities.  
 43.2      Sec. 8.  Minnesota Statutes 2000, section 471.49, 
 43.3   subdivision 10, is amended to read: 
 43.4      Subd. 10.  [PUBLIC ACCOUNTANT.] "Public accountant" means a 
 43.5   certified public accountant, or a certified public accounting 
 43.6   firm, or a licensed public accountant, all licensed by the board 
 43.7   of accountancy under sections 326.17 to 326.229 chapter 326A. 
 43.8      Sec. 9.  Minnesota Statutes 2000, section 544.42, 
 43.9   subdivision 1, is amended to read: 
 43.10     Subdivision 1.  [DEFINITIONS.] For purposes of this section:
 43.11     (1) "professional" means a licensed attorney or an 
 43.12  architect, certified public accountant, engineer, land surveyor, 
 43.13  or landscape architect licensed or certified under sections 
 43.14  326.02 to 326.229 chapter 326 or 326A; and 
 43.15     (2) "action" includes an original claim, cross-claim, 
 43.16  counterclaim, or third-party claim.  An action does not include 
 43.17  a claim for damages requiring notice pursuant to section 604.04. 
 43.18     Sec. 10.  [EFFECTIVE DATE.] 
 43.19     This article is effective January 1, 2003.