SF 2402

1st Unofficial Engrossment - 85th Legislature (2007 - 2008)

Posted on 12/15/2009 12:00 a.m.

1.1A bill for an act 1.2relating to occupations and professions; modifying provisions governing the 1.3Board of Accountancy;amending Minnesota Statutes 2006, sections 13.411, by 1.4adding a subdivision; 326A.01, subdivisions 2, 12, 17, by adding a subdivision; 1.5326A.02, subdivisions 1, 3, 4, 5, 6, by adding a subdivision; 326A.03; 326A.04; 1.6326A.05, subdivisions 1, 2, 3, 4, 5; 326A.06; 326A.07; 326A.08, subdivisions 1.72, 4, 5, 6, 7, 8, 9; 326A.10; 326A.12; 326A.13; 326A.14; repealing Minnesota 1.8Statutes 2006, section 326A.05, subdivision 9. 1.9BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.10    Section 1. Minnesota Statutes 2006, section 13.411, is amended by adding a 1.11subdivision to read: 1.12     new text begin Subd. 9. new text end new text begin Board of Accountancy. new text end new text begin Data relating to disciplinary proceedings involving new text end 1.13 new text begin licensees of the Board of Accountancy are classified under section 326A.08, subdivision 2. new text end 1.14    Sec. 2. Minnesota Statutes 2006, section 326A.01, subdivision 2, is amended to read: 1.15    Subd. 2. Attest. "Attest" means to provide the following financial statement 1.16services: 1.17(1) an audit or other engagement performed in accordance with the Statements on 1.18Auditing Standards (SAS); 1.19(2) a review of a financial statement performed in accordance with the Statements on 1.20Standards for Accounting and Review Services (SSARS); and 1.21(3) an examination of prospective financial information performed in accordance 1.22with the Statements on Standards for Attestation Engagements (SSAE). new text begin ; and new text end 1.23 new text begin (4) any engagement performed in accordance with auditing and related standards of new text end 1.24 new text begin the Public Company Accounting Oversight Board. new text end 2.1    Sec. 3. Minnesota Statutes 2006, section 326A.01, subdivision 12, is amended to read: 2.2    Subd. 12. Peer review. "Peer review" means a new text begin an independent new text end study, appraisal, or 2.3review of one or more aspects of the professional work of a certificate holder or CPA firm 2.4 new text begin licensee new text end that performs new text begin issues new text end attest or compilation services new text begin reports new text end , or the professional 2.5work of a person registered under section 326A.06, paragraph (b), by a person or persons 2.6who hold certificates and who are not affiliated with the certificate holder, CPA firm, or 2.7person being reviewed new text begin persons who are not affiliated with the licensee being reviewed new text end . 2.8    Sec. 4. Minnesota Statutes 2006, section 326A.01, is amended by adding a subdivision 2.9to read: 2.10     new text begin Subd. 13a. new text end new text begin Principal place of business. new text end new text begin "Principal place of business" means the new text end 2.11 new text begin office location designated by the licensee for purposes of substantial equivalency and new text end 2.12 new text begin reciprocity in this state and in other states. new text end 2.13    Sec. 5. Minnesota Statutes 2006, section 326A.01, subdivision 17, is amended to read: 2.14    Subd. 17. Substantial equivalency. "Substantial equivalency" is a determination 2.15under section by the Board of Accountancy or its designee that the education, 2.16examination, and experience requirements contained in the statutes and administrative 2.17rules of another jurisdiction are comparable to, or exceed the education new text begin requirements new text end 2.18 new text begin in section 326A.03, subdivisions 3 and 6, paragraph (a) new text end , examination new text begin ` requirements in new text end 2.19 new text begin section 326A.03, subdivision 4, paragraph (a) new text end , and experience requirements contained in 2.20this chapter new text begin section 326A.03, subdivision 6, paragraph (b), new text end or that an individual CPA's 2.21education, examination, and experience qualifications are comparable to or exceed 2.22the education, examination, and experience requirements contained in this chapter new text begin new text end 2.23 new text begin subdivision new text end . new text begin For purposes of ascertaining substantial equivalency under the provisions of new text end 2.24 new text begin this chapter, the board shall take into account the qualifications of the individual without new text end 2.25 new text begin regard to the sequence in which experience, education, or examination were attained. new text end 2.26    Sec. 6. Minnesota Statutes 2006, section 326A.02, subdivision 1, is amended to read: 2.27    Subdivision 1. Board. A Board of Accountancy is created to carry out the purposes 2.28and enforce the provisions of this chapter. It consists of nine citizens of this state appointed 2.29by the governor. Two must be public members as defined by section 214.02, and seven 2.30must be certified public accountants under the provisions of this chapter. Effective 2.31January 1, 2003, no fewer than five of the certified public accountants must be owners or 2.32employees of a CPA firm that holds a current permit and provides professional services at 2.33the time of appointment and reappointment. At least new text begin No fewer than new text end two new text begin board members, new text end 3.1 new text begin who may be any new text end of the seven certified public accountants new text begin , new text end at the time of appointment and 3.2reappointment must be owners or employees of a CPA firm that: 3.3(1) holds a current permit; 3.4(2) provides professional services; and 3.5(3) consists of ten or fewer certified public accountants. 3.6    Sec. 7. Minnesota Statutes 2006, section 326A.02, subdivision 3, is amended to read: 3.7    Subd. 3. Officers; proceedings. The board shall elect one of its number as chair, 3.8another as vice-chair, and another as secretary and treasurer. The officers shall hold their 3.9respective offices for a term of one year and until their successors are elected. The 3.10affirmative vote of a majority of the qualified members of the board new text begin , or a majority of a new text end 3.11 new text begin quorum of the board at any meeting duly called, new text end is considered the action of the board. 3.12The board shall meet at such times and places as may be fixed by the board. Meetings 3.13of the board are subject to chapter 13D. A majority of the board members then in office 3.14constitutes a quorum at any meeting duly called. The board shall have a seal, which 3.15must be judicially noticed. The board shall retain or arrange for the retention of all 3.16applications and all documents under oath that are filed with the board and also records of 3.17its proceedings, and it shall maintain a registry of the names and addresses of all licensees 3.18and registrants under this chapter. In any proceeding in court, civil or criminal, arising 3.19out of or founded upon any provision of this chapter, copies of records of the proceeding 3.20certified as true copies under the seal of the boards new text begin by the board chair or executive director new text end 3.21shall be admissible in evidence as tending to prove the contents of the records. 3.22    Sec. 8. Minnesota Statutes 2006, section 326A.02, subdivision 4, is amended to read: 3.23    Subd. 4. Powers. new text begin The powers and duties of the board shall be as provided in this new text end 3.24 new text begin chapter or as otherwise provided by law. new text end The board new text begin , or the complaint committee if new text end 3.25 new text begin authorized by the board, new text end may issue subpoenas to compel the attendance of witnesses and 3.26the production of documents, to administer oaths, to take testimony, to cooperate with the 3.27appropriate new text begin state, federal, foreign regulatory, or law enforcement new text end authorities in other states 3.28in investigation and enforcement concerning violations of this chapter and comparable 3.29acts of other states, and to receive evidence concerning all matters within the scope of this 3.30chapter. In case of disobedience of a subpoena, the board may invoke the aid of any court 3.31in requiring the attendance and testimony of witnesses and the production of documentary 3.32evidence. The board, its members, and its agents are immune from personal liability for 3.33actions taken in good faith in the discharge of the board's responsibilities, and the state 3.34shall hold the board, its members, and its agents harmless from all costs, damages, and 4.1attorneys fees arising from claims and suits against them with respect to matters to which 4.2such immunity applies. The board shall enforce the standard of general education, the 4.3standard of special education in the science and art of accounting, and the standard of 4.4good character and general experience new text begin laws relating to the practice of public accounting new text end , 4.5as prescribed in this chapter new text begin and rules adopted by the board new text end . 4.6    Sec. 9. Minnesota Statutes 2006, section 326A.02, subdivision 5, is amended to read: 4.7    Subd. 5. Rules. The board may adopt rules governing its administration and 4.8enforcement of this chapter and the conduct of licensees and persons registered under 4.9section 326A.06, paragraph (b), including: 4.10(1) rules governing the board's meetings and the conduct of its business; 4.11(2) rules of procedure governing the conduct of investigations and hearings and 4.12discipline by the board; 4.13(3) rules specifying the educational and experience qualifications required for the 4.14issuance of certificates and the continuing professional education required for renewal 4.15of certificates; 4.16(4) rules of professional conduct directed to controlling the quality and probity 4.17of services by licensees, and dealing among other things with independence, integrity, 4.18and objectivity; competence and technical standards; and responsibilities to the public 4.19and to clients; 4.20(5) rules governing the professional standards applicable to licensees including 4.21adoption of the statements on standards specified in section 326A.01, subdivision 2, and 4.22as developed for general application by recognized national accountancy organizations 4.23such as the American Institute of Certified Public Accountants new text begin or the Public Company new text end 4.24 new text begin Accounting Oversight Board new text end ; 4.25(6) rules governing the manner and circumstances of use of the titles "certified public 4.26accountant," "CPA," "registered accounting practitioner," and "RAP"; 4.27(7) rules regarding peer review that may be required to be performed under 4.28provisions of this chapter; 4.29(8) rules on substantial equivalence to implement section 326A.14; 4.30(9) rules regarding the conduct of the certified public accountant examination; 4.31(10) rules regarding the issuance and renewals of certificates, permits, and 4.32registrations; 4.33(11) rules regarding transition provisions to implement this chapter; 4.34(12) rules specifying the educational and experience qualifications for registration, 4.35rules of professional conduct, rules regarding peer review, rules governing standards for 5.1providing services, and rules regarding the conduct and content of examination for those 5.2persons registered under section 326A.06, paragraph (b); and 5.3(13) rules regarding fees for examinations, certificate issuance and renewal, firm 5.4permits, registrations under section 326A.06, paragraph (b), notifications made under 5.5section 326A.14, and late processing fees. new text begin ; and new text end 5.6 new text begin (14) upon any change to this chapter, if the board determines a change in Minnesota new text end 5.7 new text begin Rules is required, the board may initiate the expedited process under section 14.389 up to new text end 5.8 new text begin one year after the effective date of the change to this chapter. new text end 5.9    Sec. 10. Minnesota Statutes 2006, section 326A.02, subdivision 6, is amended to read: 5.10    Subd. 6. Complaint committee. The board shall establish a complaint committee 5.11to investigate, mediate, or initiate administrative or legal proceedings on behalf of the 5.12board with respect to complaints filed with or information received by the board alleging 5.13or indicating violations of this chapter new text begin or rules adopted by the board new text end . The complaint 5.14committee shall consist of three members of the board. 5.15    Sec. 11. Minnesota Statutes 2006, section 326A.02, is amended by adding a 5.16subdivision to read: 5.17     new text begin Subd. 8. new text end new text begin Executive director. new text end new text begin The board shall appoint an executive director to new text end 5.18 new text begin assist the board in performing its duties. new text end 5.19    Sec. 12. Minnesota Statutes 2006, section 326A.03, is amended to read: 5.20326A.03 CERTIFIED PUBLIC ACCOUNTANT QUALIFICATIONS. 5.21    Subdivision 1. Qualifications. The certificate of certified public accountant shall 5.22be granted to persons of good moral character who meet the education, experience, and 5.23examination requirements of this section and rules adopted under it and who apply 5.24under section 326A.04. 5.25Good moral character for purposes of this section new text begin chapter new text end means new text begin the propensity to new text end 5.26 new text begin provide professional services in a fair, honest, and trustworthy manner and a new text end lack of 5.27a history of dishonest or felonious acts. The board may refuse to grant a certificate on 5.28the ground of failure to satisfy this requirement only if there is a substantial connection 5.29between the lack of good moral character of the applicant and the professional 5.30responsibilities of a licensee and if the finding by the board of lack of good moral 5.31character is supported by clear and convincing evidence. When an applicant is found to 5.32be unqualified for a certificate because of a lack of good moral character, the board shall 5.33furnish the applicant a statement containing the findings of the board, a complete record 6.1of the evidence upon which the determination was based, and a notice of the applicant's 6.2right of appeal. 6.3    Subd. 2. Examination before July 1, 2006; new text begin required new text end education and experience. 6.4Until July 1, 2006, the examination must be administered by the board only to a candidate 6.5who: 6.6(1) holds a master's degree with a major in accounting from a college or university 6.7that is fully accredited by a recognized accrediting agency listed with the United States 6.8Department of Education; 6.9(2) holds a baccalaureate degree, with a major in accounting, from a college or 6.10university that is fully accredited by a recognized accrediting agency listed with the 6.11United States Department of Education or who has in the opinion of the board at least 6.12an equivalent education; 6.13(3) holds a baccalaureate degree from a college or university that is fully accredited 6.14by a recognized accrediting agency listed with the United States Department of Education, 6.15or who has in the opinion of the board at least an equivalent education, provided that at 6.16least one year of experience of the type specified in subdivision 8 has been completed; 6.17(4) provides evidence of having completed two or more years of study with a passing 6.18grade average or above from a college, university, technical college, or a Minnesota 6.19licensed private school that is fully accredited by a recognized accrediting agency listed 6.20with the United States Department of Education, or who has in the opinion of the board 6.21at least an equivalent education, provided that at least three years experience of the type 6.22specified in subdivision 8 has been completed; or 6.23(5) holds a diploma as a graduate of an accredited high school, or who has in the 6.24opinion of the board at least an equivalent education, provided that at least five years 6.25experience of the type specified in subdivision 8 has been completed. 6.26    Subd. 3. Examination new text begin on or new text end after July 1, 2006; new text begin required new text end education. On or after 6.27July 1, 2006, the examination must be administered by the board only to a candidate who 6.28has a baccalaureate or higher degree, with a major in accounting or a major in business 6.29with accounting emphasis, or an equivalent education, from a college or university 6.30that is fully accredited by a recognized accrediting agency listed with the United States 6.31Department of Education or an equivalent accrediting association. 6.32     new text begin Subd. 3a. new text end new text begin Early examination. new text end new text begin Notwithstanding any contrary provision in this new text end 6.33 new text begin section, the board may adopt rules to permit a person under certain circumstances: new text end 6.34 new text begin (1) to apply for the examination within 180 days prior to the person's anticipated new text end 6.35 new text begin completion of the education requirements; and new text end 7.1 new text begin (2) to take all or a part of the examination within 90 days of the anticipated new text end 7.2 new text begin completion of the education requirements. No credit shall be given for any part of the new text end 7.3 new text begin examination taken before completion of the education requirements in subdivision 3 new text end 7.4 new text begin unless: new text end 7.5 new text begin (i) the education requirements in subdivision 3 and adopted rule requirements are new text end 7.6 new text begin met within 120 days after taking any part of the examination; and new text end 7.7 new text begin (ii) documentation of completion of education requirements is received by the board new text end 7.8 new text begin within 150 days of the person taking any part of the examination. new text end 7.9    Subd. 4. Examination requirements. (a) The examination required to be passed 7.10as a condition for the granting of a certificate must be held as often as convenient, in the 7.11opinion of the board, and must test the applicant's knowledge of the subjects of accounting 7.12and auditing, and other related subjects that the board may specify by rule, including but 7.13not limited to business law and taxation. The time for holding the examination must be 7.14determined by the board and may be changed from time to time. The board shall prescribe 7.15by rule the methods of applying for and conducting the examination, including methods 7.16for grading and determining a passing grade required of an applicant for a certificate. 7.17However, the board shall to the extent possible ensure that the examination itself, grading 7.18of the examination, and the passing grades, are uniform with those applicable in all other 7.19states. The board may make such use of all or any part of the Uniform Certified Public 7.20Accountant Examination and Advisory Grading Service of the American Institute of 7.21Certified Public Accountants and may contract with third parties to perform administrative 7.22services with respect to the examination that it considers appropriate to assist it in 7.23performing its duties under this paragraph. 7.24(b) The board may charge, or provide for a third party administering the examination 7.25to charge, each applicant a fee. 7.26    Subd. 5. Certificate before July 1, 2006; new text begin required new text end experience. Until July 1, 2006, 7.27those persons new text begin a person new text end who have new text begin has new text end passed the examination required by this section and 7.28who meet new text begin meets new text end all other requirements for a certificate, including payment of required 7.29fees, must be granted certificates new text begin a certificate new text end as new text begin a new text end certified public accountants new text begin accountant new text end , 7.30providing that they have new text begin the person has new text end completed the following experience requirements 7.31of the type specified in subdivision 8 in addition to any experience already required in 7.32subdivision 2: 7.33(1) for those whose educational qualifications meet the requirements of subdivision 7.342, clause (1), the experience requirement is one year; 7.35(2) for those whose educational qualifications meet the requirements of subdivision 7.362, clause (2), the experience requirement is two years; 8.1(3) for those whose educational and experience qualifications meet the requirements 8.2of subdivision 2, clause (3), the additional required experience is two years; 8.3(4) for those whose educational and experience qualifications meet the requirements 8.4of subdivision 2, clause (4), the additional required experience is two years; and 8.5(5) for those whose educational and experience qualifications meet the requirements 8.6of subdivision 2, clause (5), the additional required experience is one year. 8.7    Subd. 6. Certificate new text begin on or new text end after July 1, 2006; new text begin required new text end education and experience. 8.8(a) On or after July 1, 2006, those persons new text begin a person new text end who have new text begin has new text end passed the examination 8.9required in this section must be granted certificates new text begin a certificate new text end as new text begin a new text end certified public 8.10accountants new text begin accountant new text end provided they certify new text begin : (1) the person certifies new text end to the board that 8.11they have new text begin the person has new text end completed at least 150 semester or 225 quarter hours at a college 8.12or university that is fully accredited by a recognized accrediting agency listed with the 8.13United States Department of Education, or an equivalent accrediting association, and 8.14have new text begin has new text end completed at least one year of experience of the type specified in paragraph (b) new text begin ; new text end 8.15 new text begin (2) the board verifies the certifications; and (3) the person complies with requirements new text end 8.16 new text begin for initial issuance of the certificate as a certified public accountant as prescribed by new text end 8.17 new text begin the board by rule new text end . 8.18(b) An applicant for initial issuance of a certificate under this subdivision shall 8.19show that the applicant has had one year of experience. Acceptable experience 8.20includes providing any type of service or advice involving the use of accounting, attest, 8.21compilation, management advisory, financial advisory, tax, or consulting skills, as verified 8.22by a licensee and meeting requirements prescribed by the board by rule. Acceptable 8.23experience may be gained through employment in government, industry, academia, or 8.24public practice. Experience as an auditor in the Office of the Legislative Auditor or State 8.25Auditor, as verified by a licensee, shall be acceptable experience. 8.26    Subd. 7. Equivalent education criteria. The board, in consultation with the 8.27University of Minnesota, the Minnesota State Colleges and Universities, private colleges, 8.28and private career schools regulated under chapter 141, shall establish criteria to assess 8.29equivalent education for purposes of subdivision 3. 8.30    Subd. 8. Qualifying experience until July 1, 2006. Until July 1, 2006, qualifying 8.31experience includes public accounting experience: 8.32(1) as a staff employee of a certified public accountant, or a firm; 8.33(2) as an auditor in the Office of the Legislative Auditor or State Auditor, or as an 8.34auditor or examiner with any other agency of government, if the experience, in the opinion 8.35of the board, is equally comprehensive and diversified; 8.36(3) as a self-employed public accountant or as a partner in a firm; or 9.1(4) in any combination of the foregoing capacities. 9.2    Sec. 13. Minnesota Statutes 2006, section 326A.04, is amended to read: 9.3326A.04 CERTIFICATE ISSUED OR RENEWED new text begin ISSUANCE AND new text end 9.4 new text begin RENEWAL new text end ; COMPETENCY STANDARD. 9.5    Subdivision 1. Eligibility. The board shall grant or renew certificates to persons 9.6 new text begin a person of good moral character new text end who make new text begin makes an new text end application and demonstrate: 9.7(1) new text begin demonstrates new text end that their new text begin the person's new text end qualifications, including where applicable the 9.8qualifications prescribed by section 326A.03, are in accordance with this section; or new text begin and new text end 9.9 new text begin rules adopted by the board. new text end 9.10(2) that they are eligible under the substantial equivalency standard in section 9.11326A.14, subdivision 1, paragraph (b), which requires licensure for those certified public 9.12accountants who establish their principal places of business in another state. The holder of 9.13a certificate issued under this section may only provide attest services in a CPA firm that 9.14holds a permit issued under section 326A.05. 9.15    Subd. 2. Timing. (a) Certificates must be initially issued and renewed for periods 9.16of not more than one year new text begin three years new text end but in any event must expire on the December 31 9.17following issuance or renewal new text begin in the year prescribed by the board by rule new text end . Applications for 9.18certificates must be made in the form, and in the case of applications for renewal between 9.19the dates, specified by the board in rule. The board shall grant or deny an application no 9.20later than 90 days after the application is filed in proper form. If the applicant seeks the 9.21opportunity to show that issuance or renewal of a certificate was mistakenly denied, or if 9.22the board is unable to determine whether it should be granted or denied, the board may 9.23issue to the applicant a provisional certificate that expires 90 days after its issuance, or 9.24when the board determines whether or not to issue or renew the certificate for which 9.25application was made, whichever occurs first. 9.26(b) Certificate holders who do not provide professional services and do not use the 9.27certified public accountant designation in any manner are not required to renew their 9.28certificates provided they have notified the board as provided in board rule and comply 9.29with the requirements for nonrenewal as specified in board rule. 9.30 new text begin (c) Applications for renewal of a certificate that are complete and timely filed with new text end 9.31 new text begin the board and are not granted or denied by the board before January 1 are renewed on a new text end 9.32 new text begin provisional basis as of January 1 and for 90 days thereafter, or until the board grants or new text end 9.33 new text begin denies the renewal of the certificate, whichever occurs first, provided the licensee meets new text end 9.34 new text begin the requirements in this chapter and rules adopted by the board. new text end 10.1    Subd. 3. Residents of other states. (a) With regard to applicants new text begin an applicant new text end 10.2who do new text begin must obtain a certificate in this state because the applicant does new text end not qualify for 10.3reciprocity under the substantial equivalency standard in section 326A.14, subdivision 10.41 , paragraph (b), the board shall issue a certificate to a holder of a certificate, license, or 10.5permit issued by another state upon a showing that: 10.6(1) the applicant passed the examination required for issuance of the applicant's new text begin a new text end 10.7certificate with grades that would have been passing grades at the time in this state; 10.8(2) the applicant had four years of experience outside of this state of the type 10.9described in section 326A.03, subdivision 6, paragraph (b), if application is made on or 10.10after July 1, 2006, or section 326A.03, subdivision 8, if application is made before July 10.111, 2006; or the applicant meets equivalent requirements prescribed by the board by rule, 10.12after passing the examination upon which the applicant's certificate was based and within 10.13the ten years immediately preceding the application; and 10.14(3) if the applicant's certificate, license, or permit was issued more than four years 10.15prior to the application for issuance of an initial certificate under this subdivision, that the 10.16applicant has fulfilled the requirements of continuing professional education that would 10.17have been applicable under subdivision 4. new text begin ; and new text end 10.18 new text begin (4) the applicant has met the qualifications prescribed by the board by rule. new text end 10.19(b) As an alternative to the requirements of paragraph (a), A certificate holder 10.20licensed by another state who establishes a principal place of business in this state shall 10.21request the issuance of a certificate from the board prior to establishing the principal place 10.22of business. The board shall issue a certificate to the person if the person's individual 10.23certified public accountant qualifications, upon verification, are substantially equivalent 10.24to the certified public accountant licensure requirements of this chapter new text begin or the person new text end 10.25 new text begin meets equivalent requirements as the board prescribes by rule. Residents of this state new text end 10.26 new text begin who provide professional services in this state at an office location in this state shall be new text end 10.27 new text begin considered to have their principal place of business in this state new text end . 10.28    Subd. 4. Program of learning. For renewal of a certificate under this section, 10.29Each licensee shall participate in a program of learning designed to maintain professional 10.30competency. The program of learning must comply with rules adopted by the board. 10.31The board may by rule create an exception to this requirement for licensees who do not 10.32perform or offer to perform for the public one or more kinds of services involving the use 10.33of accounting or auditing skills, including issuance of reports on financial statements or of 10.34one or more kinds of management advisory, financial advisory or consulting services, or 10.35the preparation of tax returns or the furnishing of advice on tax matters. A licensee granted 10.36such an exception by the board must place the word "inactive" adjacent to the CPA title 11.1on any business card, letterhead, or any other document or device, with the exception of 11.2the licensee's certificate on which the CPA title appears. 11.3    Subd. 5. Fee. The board shall charge a fee for each application for initial issuance or 11.4renewal of a certificate under this section. 11.5    Subd. 6. Other state licenses. Applicants new text begin An applicant new text end for initial issuance or 11.6renewal of certificates new text begin a certificate new text end under this section shall in their applications list new text begin in new text end 11.7 new text begin the application new text end all states in which they have new text begin the applicant has new text end applied for or hold new text begin holds new text end 11.8certificates, licenses, or permits new text begin , new text end and list any past denial, revocation, or suspension of a 11.9certificate, license, or permit. Each holder of or applicant for a certificate under this section 11.10shall notify the board in writing, within 30 days after its occurrence, of any issuance, 11.11denial, revocation, or suspension of a certificate, license, or permit by another state. 11.12    Subd. 7. Certificates issued by foreign countries. The board shall issue a 11.13certificate to a holder of a substantially new text begin generally new text end equivalent foreign country designation, 11.14provided that: 11.15(1) the foreign authority that granted the designation makes similar provision to 11.16allow a person who holds a valid certificate issued by this state to obtain the foreign 11.17authority's comparable designation; 11.18(2) the foreign designation: 11.19(i) was duly issued by a foreign authority that regulates the practice of public 11.20accountancy and the foreign designation has not expired or been revoked or suspended; 11.21(ii) entitles the holder to issue reports upon financial statements; and 11.22(iii) was issued upon the basis of educational, examination, and experience 11.23requirements established by the foreign authority or by law; and 11.24(3) the applicant: 11.25(i) received the designation, based on educational and examination standards 11.26substantially new text begin generally new text end equivalent to those in effect in this state, at the time the foreign 11.27designation was granted; 11.28(ii) has, within the ten years immediately preceding the application, completed an 11.29experience requirement that is substantially new text begin generally new text end equivalent to the requirement in 11.30section 326A.03, subdivision 6, paragraph (b), if application is made on or after July 1, 11.312006, or section 326A.03, subdivision 8, if application is made before July 1, 2006, in 11.32the jurisdiction that granted the foreign designation; completed four years of professional 11.33experience in this state; or met equivalent requirements prescribed by the board by 11.34rule; and 12.1(iii) passed a uniform qualifying examination in national standards and an 12.2examination on the laws, regulations, and code of ethical conduct in effect in this state 12.3acceptable to new text begin as new text end the board new text begin prescribes by rule new text end . 12.4    Subd. 8. Other jurisdictions in which foreign applicant is licensed. An applicant 12.5under subdivision 7 shall new text begin list new text end in the application list all jurisdictions, foreign and domestic, 12.6in which the applicant has applied for or holds a designation to practice public accountancy. 12.7Each holder of a certificate issued under subdivision 7 shall notify the board in writing, 12.8within 30 days after its occurrence, of any issuance, denial, revocation, or suspension of a 12.9designation or commencement of a disciplinary or enforcement action by any jurisdiction. 12.10    Subd. 9. Application by foreign certificate holder. The board has the sole 12.11authority to interpret the application of the provisions of subdivisions 7 and 8. 12.12    Subd. 10. Peer review. The board shall by rule require as a condition for renewal 12.13of a certificate under this section by any certificate holder who performs compilation 12.14services for the public other than through a CPA firm, that the individual undergo, no more 12.15frequently than once every three years, a peer review conducted in a manner specified 12.16by the board in rule. The review shall include verification that the individual has met the 12.17competency requirements set out in professional standards for the services described in 12.18this subdivision as set forth by rule. 12.19    Subd. 11. Automatic revocation. The certificates new text begin certificate new text end of persons new text begin a person new text end 12.20who fail new text begin fails new text end to renew their certificates new text begin a certificate new text end for more than two years after 12.21expiration new text begin or the certificate of a person who had not reported required experience to the new text end 12.22 new text begin board by January 1, 2003, and who fails to report the required experience under Minnesota new text end 12.23 new text begin Rules new text end shall be automatically revoked by order of the board. The orders may be issued by 12.24the board without following the procedures of chapter 14, provided the board notifies each 12.25such new text begin affected new text end person by mail at the person's last known address on file with the board at 12.26least three days prior to the issuance of any such order. No notice is required if the last 12.27communication sent by the board to a licensee was returned to the board by the United 12.28States Postal Service as undeliverable and with no forwarding address. Certificates so 12.29revoked by the board may be reinstated, if at all, under section 326A.09. This subdivision 12.30does not apply to certified public accountants who have notified the board new text begin , according to new text end 12.31 new text begin requirements prescribed by board rule, new text end that they will not use the CPA designation in any 12.32manner and will not provide professional services. 12.33     new text begin Subd. 12. new text end new text begin Professional ethics examination. new text end new text begin The board shall adopt rules new text end 12.34 new text begin establishing requirements for a professional ethics examination which must be completed new text end 12.35 new text begin before an initial certificate is issued under this section. new text end 13.1    Sec. 14. Minnesota Statutes 2006, section 326A.05, subdivision 1, is amended to read: 13.2    Subdivision 1. General. The board shall grant or renew permits to practice as a CPA 13.3firm to entities that make application and demonstrate their qualifications in accordance 13.4with this section. A firm must hold a permit issued under this section in order to provide 13.5attest services or to use the title "CPAs" or "CPA firm." 13.6 new text begin (a) The following must hold a permit issued under this section: new text end 13.7 new text begin (1) any firm with an office in this state performing attest services as defined in new text end 13.8 new text begin section 326A.01, subdivision 2; new text end 13.9 new text begin (2) to the extent required by section 326A.10, paragraph (k), any firm with an office new text end 13.10 new text begin in this state performing compilation services as defined in section 326A.01, subdivision 6; new text end 13.11 new text begin (3) any firm with an office in this state that uses the title "CPA" or "CPA firm"; or new text end 13.12 new text begin (4) any firm that does not have an office in this state but performs attest services new text end 13.13 new text begin as described in section 326A.01, subdivision 2, paragraph (1), (3), or (4), for a client new text end 13.14 new text begin having its headquarters in this state. new text end 13.15 new text begin (b) A firm possessing a valid permit from another state which does not have an office new text end 13.16 new text begin in this state may perform services described in section 326A.01, subdivision 2, clause (2), new text end 13.17 new text begin or subdivision 6, for a client having its headquarters in this state and may use the title new text end 13.18 new text begin "CPA" or "CPA firm" without a permit issued under this section only if: new text end 13.19 new text begin (1) it has the qualifications described in subdivision 3, paragraph (b); new text end 13.20 new text begin (2) as a condition to the renewal of the firm's permit issued by the other state, that new text end 13.21 new text begin state requires a peer review which contains the requirements equivalent to subdivision 8, new text end 13.22 new text begin paragraphs (a) and (e); and new text end 13.23 new text begin (3) it performs the services through an individual who has been granted practice new text end 13.24 new text begin privileges under section 326A.14. new text end 13.25 new text begin (c) A firm possessing a valid permit from another state that does not have an office new text end 13.26 new text begin in this state and which is not subject to the requirements of paragraph (a), clause (4), or new text end 13.27 new text begin (b), may perform other professional services while using the title "CPA" or "CPA firm" in new text end 13.28 new text begin this state without a permit issued under this section only if the firm: new text end 13.29 new text begin (1) has the qualifications described in subdivision 3, paragraph (b); new text end 13.30 new text begin (2) performs the services through an individual who has been granted practice new text end 13.31 new text begin privileges under section 326A.14; and new text end 13.32 new text begin (3) can lawfully perform the services in the state where the individuals with practice new text end 13.33 new text begin privileges have their principal place of business. new text end 13.34    Sec. 15. Minnesota Statutes 2006, section 326A.05, subdivision 2, is amended to read: 14.1    Subd. 2. Timing. new text begin (a) new text end Permits must be initially issued and renewed for periods of 14.2not more than one year but in any event must expire on December 31 following issuance 14.3or renewal. Applications for permits shall be made in the form, and in the case of 14.4applications for renewal between the dates, as the board specifies in rule. The board shall 14.5grant or deny an application no later than 90 days after the application is filed in proper 14.6form. If the applicant seeks the opportunity to show that issuance or renewal of a permit 14.7was mistakenly denied or if the board is not able to determine whether it should be granted 14.8or denied, the board may issue to the applicant a provisional permit, which expires 90 14.9days after its issuance, or when the board determines whether or not to issue or renew the 14.10permit for which application was made, whichever occurs first. 14.11 new text begin (b) Applications for renewal of a permit that are complete and timely filed with the new text end 14.12 new text begin board and are not granted or denied by the board before January 1 are renewed on a new text end 14.13 new text begin provisional basis as of January 1 and for 90 days thereafter, or until the board grants new text end 14.14 new text begin or denies the permit, whichever occurs first, provided the licensee meets the renewal new text end 14.15 new text begin requirements in this chapter and rules adopted by the board. new text end 14.16    Sec. 16. Minnesota Statutes 2006, section 326A.05, subdivision 3, is amended to read: 14.17    Subd. 3. Qualifications. (a) An applicant for initial issuance or renewal of a permit 14.18to practice under this section shall comply with the requirements in this subdivision. 14.19(b) Notwithstanding chapter 319B or any other provision of law, a simple majority 14.20of the ownership of the firm, in terms of financial interests and voting rights of all partners, 14.21officers, shareholders, members, or managers, must belong to holders of certificates who 14.22are licensed in some state, and the partners, officers, shareholders, members, or managers, 14.23whose principal place of business is in this state, and who perform professional services in 14.24this state, must hold valid certificates issued under section 326A.04 or the corresponding 14.25provision of prior law. Although firms may include nonlicensee owners, the firm and 14.26its ownership must comply with rules adopted by the board. The firm shall register all 14.27nonlicensee owners with the state board as set forth by rule. new text begin An individual who has been new text end 14.28 new text begin granted practice privileges under section 326A.14 and who performs services for which new text end 14.29 new text begin a firm permit is required under section 326A.14, subdivision 1, paragraph (d), is not new text end 14.30 new text begin required to obtain a certificate from the board under section 326A.04. new text end 14.31(c) A CPA firm may include nonlicensee owners provided that: 14.32(1) the firm designates a licensee of this state, new text begin or in the case of a firm that must new text end 14.33 new text begin have a permit according to section 326A.14, subdivision 1, paragraph (d), a licensee of new text end 14.34 new text begin another state who meets the requirements in section 326A.14, subdivision 1, paragraph new text end 15.1 new text begin (a) or (b), new text end who is responsible for the proper registration of the firm and identifies that 15.2individual to the board; 15.3(2) all nonlicensee owners are new text begin persons of good moral character and are new text end active 15.4individual participants in the CPA firm or affiliated entities; and 15.5(3) the firm complies with other requirements imposed by the board in rule. 15.6(d) An individual licensee new text begin and any individual granted practice privileges under new text end 15.7 new text begin section 326A.14 new text end who is responsible for supervising attest or compilation services and 15.8signs or authorizes someone to sign the accountant's report on the financial statements 15.9on behalf of the firm, shall meet the competency requirements set out in the professional 15.10standards for such services. 15.11(e) An individual licensee new text begin and any individual granted practice privileges under new text end 15.12 new text begin section 326A.14 new text end who signs or authorizes someone to sign the accountants' report on 15.13the financial statements on behalf of the firm shall meet the competency requirement of 15.14paragraph (d). 15.15    Sec. 17. Minnesota Statutes 2006, section 326A.05, subdivision 4, is amended to read: 15.16    Subd. 4. Initial issuance or renewal. An applicant for initial issuance or renewal of 15.17a permit to practice under this section shall register each office of the firm within this state 15.18with the board and to show that all attest and compilation services rendered in this state 15.19are under the charge of a person holding a valid certificate, or the corresponding provision 15.20of prior law new text begin issued by this state or another state new text end . 15.21    Sec. 18. Minnesota Statutes 2006, section 326A.05, subdivision 5, is amended to read: 15.22    Subd. 5. Fees. The board shall charge a fee for each application for initial issuance 15.23or renewal of a permit under this section. new text begin A firm that is required to hold a permit under new text end 15.24 new text begin this section and has one or more offices located in another state shall pay an initial permit new text end 15.25 new text begin issuance fee of $100 and an annual renewal fee of $68. new text end 15.26    Sec. 19. Minnesota Statutes 2006, section 326A.06, is amended to read: 15.27326A.06 ACCOUNTING PRACTITIONER; REGISTRATION; 15.28CERTIFICATE new text begin LPA'S AND ACCOUNTING PRACTITIONERS new text end . 15.29(a) All licensed public accountants (LPAs) who are actively licensed by the state 15.30board on December 31, 2002, shall be issued a certified public accountant certificate. 15.31LPAs are those accountants who were eligible for licensure on July 1, 1979, under the 15.32law in effect on that date and who were issued a license as a licensed public accountant 15.33by the board at that time. 16.1(b) By July 1, 2004, The board shall implement a voluntary registration of 16.2accounting practitioners. The board shall prescribe by rule the limitations of practice, 16.3educational preparation, examination, registration, fees, peer review, and continuing 16.4education requirements for the registration. The board shall consult with the University of 16.5Minnesota, the Minnesota State Colleges and Universities, the Minnesota Association of 16.6Private Postsecondary Schools, the Private College Council, the Minnesota Association 16.7of Public Accountants, and other organizations as appropriate in the implementation 16.8of this section. 16.9    Sec. 20. Minnesota Statutes 2006, section 326A.07, is amended to read: 16.10326A.07 APPOINTMENT OF SECRETARY OF STATE AS AGENT. 16.11Application by a person or a firm not a resident of this state for a certificate 16.12 new text begin issued under section 326A.04 new text end or a permit new text begin issued under section 326A.05 new text end shall constitute 16.13appointment of the secretary of state as the applicant's agent upon whom process may be 16.14served in any action or proceeding against the applicant arising out of any transaction 16.15or operation connected with or incidental to services performed by the applicant while 16.16a licensee within this state. 16.17    Sec. 21. Minnesota Statutes 2006, section 326A.08, subdivision 2, is amended to read: 16.18    Subd. 2. Hearings conducted under chapter 14. Except as otherwise described in 16.19this section, all hearings shall be conducted in accordance with chapter 14. 16.20 new text begin Hearings conducted under chapter 14 that relate to a disciplinary action must be closed new text end 16.21 new text begin to the public, except for individuals whose presence is necessary for conducting the new text end 16.22 new text begin proceeding or providing testimony or evidence. The hearing record and the findings, new text end 16.23 new text begin conclusions, report, and order or recommendation of the administrative law judge are new text end 16.24 new text begin private data on individuals, as defined in section 13.02, until the board issues its final order new text end 16.25 new text begin or the report or order of the administrative law judge becomes the final decision in the case. new text end 16.26    Sec. 22. Minnesota Statutes 2006, section 326A.08, subdivision 4, is amended to read: 16.27    Subd. 4. Cease and desist orders. (a) The board, or the complaint committee if 16.28authorized by the board, may issue and have served upon a certificate holder, a permit 16.29holder, a registration holder, a person with practice privileges granted under section 16.30326A.14 new text begin , a person new text end who has previously been subject to a disciplinary order by the board, 16.31or an unlicensed firm or person an order requiring the person or firm to cease and desist 16.32from the act or practice constituting a violation of the statute, rule, or order. The order 16.33must be calculated to give reasonable notice of the rights of the person or firm to request a 17.1hearing and must state the reasons for the entry of the order. No order may be issued until 17.2an investigation of the facts has been conducted pursuant to section 214.10. 17.3(b) Service of the order is effective when the order is served on the person, firm, or 17.4counsel of record personally, or by certified mail to the most recent address provided to 17.5the board for the person, firm, or counsel of record. 17.6(c) Unless otherwise agreed by the board, or the complaint committee if authorized 17.7by the board, and the person or firm requesting the hearing, the hearing must be held no 17.8later than 30 days after the request for the hearing is received by the board. 17.9(d) The administrative law judge shall issue a report within 30 days of the close of 17.10the contested case hearing record, notwithstanding Minnesota Rules, part 1400.8100, 17.11subpart 3. Within 30 days after receiving the report and any exceptions to it, the board 17.12shall issue a further order vacating, modifying, or making permanent the cease and desist 17.13orders as the facts require. 17.14(e) If no hearing is requested within 30 days of service of the order, the order 17.15becomes final and remains in effect until it is modified or vacated by the board. 17.16(f) If the person or firm to whom a cease and desist order is issued fails to appear at 17.17the hearing after being duly notified, the person or firm is in default and the proceeding 17.18may be determined against that person or firm upon consideration of the cease and desist 17.19order, the allegations of which may be considered to be true. 17.20(g) In lieu of or in addition to the order provided in paragraph (a), the board may 17.21require the person or firm to provide to the board a true and complete list of the person's 17.22or firm's clientele so that they can, if deemed necessary, be notified of the board's action. 17.23Failure to do so, or to provide an incomplete or inaccurate list, is an act discreditable. 17.24    Sec. 23. Minnesota Statutes 2006, section 326A.08, subdivision 5, is amended to read: 17.25    Subd. 5. Actions against persons or firms. (a) The board may, by order, deny, 17.26refuse to renew, suspend, temporarily suspend, or revoke the application, or practice 17.27privileges, registration or certificate of a person or firm; censure or reprimand the person 17.28or firm; prohibit the person or firm from preparing tax returns or reporting on financial 17.29statements; new text begin limit the scope of practice of any licensee; limit privileges under section new text end 17.30 new text begin 326A.14; new text end refuse to permit a person to sit for examination; or refuse to release the person's 17.31examination grades if the board finds that the order is in the public interest and that, based 17.32on a preponderance of the evidence presented, the person or firm: 17.33(1) has violated a statute, rule, or order that the board has issued or is empowered 17.34to enforce; 18.1(2) has engaged in conduct or acts that are fraudulent, deceptive, or dishonest 18.2whether or not the conduct or acts relate to performing or offering to perform professional 18.3services, providing that the fraudulent, deceptive, or dishonest conduct or acts reflect 18.4adversely on the person's or firm's ability or fitness to provide professional services; 18.5(3) has engaged in conduct or acts that are negligent or otherwise in violation of 18.6the standards established by board rule, where the conduct or acts relate to providing 18.7professional services new text begin , including in the filing or failure to file the licensee's income tax new text end 18.8 new text begin returns new text end ; 18.9(4) has been convicted of, has pled guilty or nolo contendere to, or has been 18.10sentenced as a result of the commission of a felony or crime, an element of which is 18.11dishonesty or fraud; has been shown to have or admitted to having engaged in acts or 18.12practices tending to show that the person or firm is incompetent; or has engaged in conduct 18.13reflecting adversely on the person's or firm's ability or fitness to provide professional 18.14services, whether or not new text begin a conviction was obtained or new text end a plea was entered or withheld new text begin and new text end 18.15 new text begin whether or not dishonesty or fraud was an element of the conduct new text end ; 18.16(5) employed fraud or deception in obtaining a certificate, permit, registration, 18.17practice privileges, renewal, or reinstatement or in passing all or a portion of the 18.18examination; 18.19(6) has had the person's or firm's permit, registration, practice privileges, certificate, 18.20right to examine, or other similar authority revoked, suspended, canceled, limited, or not 18.21renewed for cause, or has committed unprofessional acts for which the person or firm was 18.22otherwise disciplined or sanctioned, including, but not limited to, being ordered to or 18.23agreeing to cease and desist from prescribed conduct, in any state or any foreign country; 18.24(7) has had the person's or firm's right to practice before any federal, state, or 18.25other government agency new text begin , or Public Company Accounting Oversight Board new text end revoked, 18.26suspended, canceled, limited, or not renewed for cause, or has committed unprofessional 18.27acts for which the person or firm was otherwise disciplined or sanctioned, including, but 18.28not limited to, being ordered to or agreeing to cease and desist from prescribed conduct; 18.29(8) failed to meet any requirement for the issuance or renewal of the person's or 18.30firm's certificate, registration or permit, or for practice privileges; 18.31(9) with respect to temporary suspension orders, has committed an act, engaged in 18.32conduct, or committed practices that may result or may have resulted, in the opinion of the 18.33board or the complaint committee if authorized by the board, in an immediate threat to 18.34the public; or 19.1(10) has engaged in any conduct reflecting adversely upon the person's or firm's 19.2fitness to perform services while a licensee, individual granted privileges under section 19.3326A.14 , or a person registered under section 326A.06, paragraph (b). new text begin ; or new text end 19.4 new text begin (11) has, prior to a voluntary surrender of a certificate or permit to the board, new text end 19.5 new text begin engaged in conduct which at any time resulted in the discipline or sanction described new text end 19.6 new text begin in clause (6) or (7). new text end 19.7(b) In lieu of or in addition to any remedy provided in paragraph (a), the board new text begin , new text end 19.8 new text begin or the complaint committee if authorized by the board, new text end may require, as a condition of 19.9continued possession of a certificate, a registration, or practice privileges, termination 19.10of suspension, reinstatement of permit, registration of a person or firm or of practice 19.11privileges under section 326A.14, a certificate, an examination, or release of examination 19.12grades, that the person or firm: 19.13(1) submit to a peer review of the person's or firm's ability, skills, or quality of work, 19.14conducted in a fashion and by persons, entity, or entities as required by the board; and 19.15(2) complete to the satisfaction of the board continuing professional education 19.16courses specified by the board. 19.17(c) Service of the order is effective if the order is served on the person, firm, or 19.18counsel of record personally or by certified mail to the most recent address provided to 19.19the board for the person, firm, or counsel of record. The order shall state the reasons 19.20for the entry of the order. 19.21(d) All hearings required by this subdivision must be conducted in accordance 19.22with chapter 14 except with respect to temporary suspension orders as provided for in 19.23subdivision 6. 19.24(e) In addition to the remedies authorized by this subdivision, the board new text begin , or the new text end 19.25 new text begin complaint committee if authorized by the board, new text end may enter into an agreement with the 19.26person or firm for corrective action and may unilaterally issue a warning to a person or 19.27firm. 19.28(f) The board shall not use agreements for corrective action or warnings in any 19.29situation where the person or firm has been convicted of or pled guilty or nolo contendere 19.30to a felony or crime and the felony or crime is the basis of the board's action against the 19.31person or firm, where the conduct of the person or firm indicates a pattern of related 19.32violations of paragraph (a) or the rules of the board, or where the board concludes that 19.33the conduct of the person or firm will not be deterred other than by disciplinary action 19.34under this subdivision or subdivision 4 or 6. 19.35(g) Agreements for corrective action may be used by the board, or the complaint 19.36committee if authorized by the board, where the violation committed by the person or firm 20.1does not warrant disciplinary action pursuant to this subdivision or subdivision 4 or 6, but 20.2where the board, or the complaint committee if authorized by the board, determines that 20.3corrective action is required to prevent further such violations and to otherwise protect 20.4the public. Warnings may be used by the board, or the complaint committee if authorized 20.5by the board, where the violation of the person or firm is de minimus, does not warrant 20.6disciplinary action under this subdivision or subdivision 4 or 6, and does not require 20.7corrective action to protect the public. 20.8(h) Agreements for corrective action must not be considered disciplinary action 20.9against the person's or firm's application, permit, registration or certificate, or practice 20.10privileges under section 326A.14. However, agreements for corrective action are public 20.11data. Warnings must not be considered disciplinary action against the person's or firm's 20.12application, permit, registration, or certificate or person's practice privileges and are 20.13private data. 20.14    Sec. 24. Minnesota Statutes 2006, section 326A.08, subdivision 6, is amended to read: 20.15    Subd. 6. Temporary suspension order new text begin provisions new text end . (a) When the board, or the 20.16complaint committee if authorized by the board, issues a temporary suspension order, the 20.17suspension is in effect upon service of a written order on the person, firm, or counsel of 20.18record new text begin as provided in subdivision 4, paragraph (b) new text end , specifying the statute, rule, or order 20.19violated. The order remains in effect until the board issues a final order in the matter after 20.20a hearing or upon agreement between the board and the person or firm. 20.21(b) The order may prohibit the person or firm from providing professional services 20.22in whole or in part, as the facts may require, and may condition the end of such suspension 20.23on compliance with a statute, rule, or order that the board has issued or is empowered 20.24to enforce. 20.25(c) The order must set forth the rights to hearing contained in this section and must 20.26state the reasons for the entry of order. 20.27(d) Within ten days after service of the order, the person or firm may request a 20.28hearing in writing. The board shall hold a hearing before its own members within five 20.29working days of a receipt of a request for hearing or within five working days of receipt of 20.30a request for hearing on the sole issue of whether there is a reasonable basis to continue, 20.31modify, or lift the temporary suspension. This hearing is not subject to chapter 14. 20.32Evidence presented by the board or the person or firm shall be in affidavit form only. The 20.33person, firm, or counsel of record may appear for oral argument. 20.34(e) Within five working days after the hearing, the board shall issue its order and, 20.35if the suspension is continued, schedule a contested case hearing within 30 days after 21.1issuance of the order. The administrative law judge shall issue a report within 30 days 21.2after closing of the contested case hearing record, notwithstanding the provisions of 21.3Minnesota Rules, part 1400.8100, subpart 3. The board shall issue a final order within 30 21.4days after receipt of that report. 21.5    Sec. 25. Minnesota Statutes 2006, section 326A.08, subdivision 7, is amended to read: 21.6    Subd. 7. Violation; penalties; costs of proceeding. (a) The board may impose a 21.7civil penalty not to exceed $2,000 per violation upon a person or new text begin a new text end firm that violates an 21.8order, statute, or rule that the board has issued or is empowered to enforce. 21.9(b) The board may, in addition, impose a fee to reimburse the board for all or 21.10part of the cost of the proceedings, including reasonable investigative costs, resulting 21.11in disciplinary or corrective action authorized by this section, the imposition of civil 21.12penalties, or the issuance of a cease and desist order. The fee may be imposed when the 21.13board shows that the position of the person or firm that violates a statute, rule, or order 21.14that the board has issued or is empowered to enforce is not substantially justified, unless 21.15special circumstances make an award unjust, notwithstanding the provisions of Minnesota 21.16Rules, part 1400.8401. The costs include, but are not limited to, the amount paid by the 21.17board for services from the office of administrative hearings, attorney and reasonable 21.18investigative fees, court reporters, witnesses, reproduction of records, board members' per 21.19diem compensation, board staff time, and expense incurred by board members and staff. 21.20(c) All hearings required by this subdivision must be conducted in accordance with 21.21chapter 14. 21.22    Sec. 26. Minnesota Statutes 2006, section 326A.08, subdivision 8, is amended to read: 21.23    Subd. 8. new text begin Other new text end persons and entities subject to discipline. Any person or entity 21.24who prepares or reports on financial statements or schedules for a client for a fee is subject 21.25to this section and the practice of the person or entity may be disciplined by the boards 21.26 new text begin board new text end as provided for in this section. The board may discipline a person or entity based on 21.27violations of this chapter, the board's rules, or misrepresentations made by the person or 21.28entity regarding the work the person or entity performed. 21.29    Sec. 27. Minnesota Statutes 2006, section 326A.08, subdivision 9, is amended to read: 21.30    Subd. 9. Notification of other states. In any case where the board renders a 21.31decision imposing discipline against a person or firm, the board shall examine its records 21.32to determine whether the person or firm holds a certificate or a permit in any other state. If 22.1so, the board shall notify the board of accountancy of the other state of its decision, by 22.2mail new text begin or by other reasonable means new text end , within 45 days of the decision becoming final. 22.3    Sec. 28. Minnesota Statutes 2006, section 326A.10, is amended to read: 22.4326A.10 UNLAWFUL ACTS. 22.5(a) Only a licensee new text begin and individuals who have been granted practice privileges new text end 22.6 new text begin under section 326A.14 new text end may issue a report on financial statements of any person, firm, 22.7organization, or governmental unit that results from providing attest services, or offer to 22.8render or render any attest service. Only a certified public accountant, new text begin an individual who new text end 22.9 new text begin has been granted practice privileges under section 326A.14, new text end a CPA firm, or, to the extent 22.10permitted by board rule, a person registered under section 326A.06, paragraph (b), may 22.11issue a report on financial statements of any person, firm, organization, or governmental 22.12unit that results from providing compilation services or offer to render or render any 22.13compilation service. These restrictions do not prohibit any act of a public official or 22.14public employee in the performance of that person's duties or prohibit the performance 22.15by any nonlicensee of other services involving the use of accounting skills, including 22.16the preparation of tax returns, management advisory services, and the preparation of 22.17financial statements without the issuance of reports on them. Nonlicensees may prepare 22.18financial statements and issue nonattest transmittals or information on them which do not 22.19purport to be in compliance with the Statements on Standards for Accounting and Review 22.20Services (SSARS). Nonlicensees registered under section 326A.06, paragraph (b), may, 22.21to the extent permitted by board rule, prepare financial statements and issue nonattest 22.22transmittals or information on them. 22.23(b) Licensees new text begin and individuals who have been granted practice privileges under new text end 22.24 new text begin section 326A.14 new text end performing attest or compilation services must provide those services in 22.25accordance with professional standards. To the extent permitted by board rule, registered 22.26accounting practitioners performing compilation services must provide those services in 22.27accordance with standards specified in board rule. 22.28(c) A person who does not hold a valid certificate issued under section 326A.04 22.29 new text begin or a practice privilege granted under section 326A.14 new text end shall not use or assume the title 22.30"certified public accountant," the abbreviation "CPA," or any other title, designation, 22.31words, letters, abbreviation, sign, card, or device tending to indicate that the person is a 22.32certified public accountant. 22.33(d) A firm shall not provide attest services or assume or use the title "certified public 22.34accountants," the abbreviation "CPAs," or any other title, designation, words, letters, 22.35abbreviation, sign, card, or device tending to indicate that the firm is a CPA firm unless (1) 23.1the firm holds a valid permit issued under new text begin has complied with new text end section 326A.05, and (2) 23.2ownership of the firm is in accordance with this chapter and rules adopted by the board. 23.3(e) A person or firm that does not hold a valid certificate or permit issued under 23.4section 326A.04 or 326A.05 new text begin or has not otherwise complied with section 326A.04 or new text end 23.5 new text begin 326A.05 as required in this chapter new text end shall not assume or use the title "certified accountant," 23.6"chartered accountant," "enrolled accountant," "licensed accountant," "registered 23.7accountant," "accredited accountant," "accounting practitioner," "public accountant," 23.8"licensed public accountant," or any other title or designation likely to be confused 23.9with the title "certified public accountant," or use any of the abbreviations "CA," "LA," 23.10"RA," "AA," "PA," "AP," "LPA," or similar abbreviation likely to be confused with the 23.11abbreviation "CPA." The title "enrolled agent" or "EA" may only be used by individuals 23.12so designated by the Internal Revenue Service. 23.13(f) Persons registered under section 326A.06, paragraph (b), may use the title 23.14"registered accounting practitioner" or the abbreviation "RAP." A person who does not 23.15hold a valid registration under section 326A.06, paragraph (b), shall not assume or use 23.16such title or abbreviation. 23.17(g) Except to the extent permitted in paragraph (a), nonlicensees may not use 23.18language in any statement relating to the financial affairs of a person or entity that is 23.19conventionally used by licensees in reports on financial statements. In this regard, the 23.20board shall issue by rule safe harbor language that nonlicensees may use in connection 23.21with such financial information. A person or firm that does not hold a valid certificate or 23.22permit, or a registration issued under section 326A.04, 326A.05, or 326A.06, paragraph 23.23(b) , new text begin or has not otherwise complied with section 326A.04 or 326A.05 as required in this new text end 23.24 new text begin chapter new text end shall not assume or use any title or designation that includes the word "accountant" 23.25or "accounting" in connection with any other language, including the language of a report, 23.26that implies that the person or firm holds such a certificate, permit, or registration or has 23.27special competence as an accountant. A person or firm that does not hold a valid certificate 23.28or permit issued under section 326A.04 or 326A.05 new text begin or has not otherwise complied with new text end 23.29 new text begin section 326A.04 or 326A.05 as required in this chapter new text end shall not assume or use any title 23.30or designation that includes the word "auditor" in connection with any other language, 23.31including the language of a report, that implies that the person or firm holds such a 23.32certificate or permit or has special competence as an auditor. However, this paragraph 23.33does not prohibit any officer, partner, member, manager, or employee of any firm or 23.34organization from affixing that person's own signature to any statement in reference to the 23.35financial affairs of such firm or organization with any wording designating the position, 24.1title, or office that the person holds, nor prohibit any act of a public official or employee in 24.2the performance of the person's duties as such. 24.3(h) No person holding a certificate or registration or firm holding a permit under 24.4this chapter shall use a professional or firm name or designation that is misleading about 24.5the legal form of the firm, or about the persons who are partners, officers, members, 24.6managers, or shareholders of the firm, or about any other matter. However, names of one 24.7or more former partners, members, managers, or shareholders may be included in the 24.8name of a firm or its successor. 24.9(i) Paragraphs (a) to (h) do not apply to a person or firm holding a certification, 24.10designation, degree, or license granted in a foreign country entitling the holder to engage 24.11in the practice of public accountancy or its equivalent in that country, if: 24.12(1) the activities of the person or firm in this state are limited to the provision of 24.13professional services to persons or firms who are residents of, governments of, or business 24.14entities of the country in which the person holds the entitlement; 24.15(2) the person or firm performs no attest or compilation services and issues no reports 24.16with respect to the financial statements of any other persons, firms, or governmental 24.17units in this state; and 24.18(3) the person or firm does not use in this state any title or designation other than 24.19the one under which the person practices in the foreign country, followed by a translation 24.20of the title or designation into English, if it is in a different language, and by the name 24.21of the country. 24.22(j) No holder of a certificate issued under section 326A.04 may perform attest 24.23services through any business form that does not hold a valid permit issued under section 24.24326A.05 . 24.25(k) No individual licensee may issue a report in standard form upon a compilation 24.26of financial information through any form of business that does not hold a valid permit 24.27issued under section 326A.05, unless the report discloses the name of the business through 24.28which the individual is issuing the report, and the individual: 24.29(1) signs the compilation report identifying the individual as a certified public 24.30accountant; 24.31(2) meets the competency requirement provided in applicable standards; and 24.32(3) undergoes no less frequently than once every three years, a peer review 24.33conducted in a manner specified by the board in rule, and the review includes verification 24.34that the individual has met the competency requirements set out in professional standards 24.35for such services. 25.1(l) No person registered under section 326A.06, paragraph (b), may issue a report 25.2in standard form upon a compilation of financial information unless the board by rule 25.3permits the report and the person: 25.4(1) signs the compilation report identifying the individual as a registered accounting 25.5practitioner; 25.6(2) meets the competency requirements in board rule; and 25.7(3) undergoes no less frequently than once every three years a peer review conducted 25.8in a manner specified by the board in rule, and the review includes verification that the 25.9individual has met the competency requirements in board rule. 25.10(m) Nothing in this section prohibits a practicing attorney or firm of attorneys from 25.11preparing or presenting records or documents customarily prepared by an attorney or firm 25.12of attorneys in connection with the attorney's professional work in the practice of law. 25.13(n) Notwithstanding other provisions of this section, persons preparing unaudited 25.14financial statements under corresponding provisions of prior law shall be permitted to 25.15perform compilation services until six months after the board adopts rules under section 25.16. new text begin The board shall adopt rules that place limitations on receipt by a licensee or a new text end 25.17 new text begin person who holds a registration under section 326A.06, paragraph (b), of: new text end 25.18 new text begin (1) contingent fees for professional services performed; and new text end 25.19 new text begin (2) commissions or referral fees for recommending or referring to a client any new text end 25.20 new text begin product or service. new text end 25.21 new text begin (o) Anything in this section to the contrary notwithstanding, it shall not be a violation new text end 25.22 new text begin of this section for a firm not holding a valid permit under section 326A.05 and not having new text end 25.23 new text begin an office in this state to provide its professional services in this state so long as it complies new text end 25.24 new text begin with the applicable requirements of section 326A.05, subdivision 1. new text end 25.25    Sec. 29. Minnesota Statutes 2006, section 326A.12, is amended to read: 25.26326A.12 CONFIDENTIAL COMMUNICATIONS. 25.27(a) Except by permission of the client for whom a licensee performs services 25.28or the heirs, successors, or personal representatives of the client, a licensee shall not 25.29voluntarily disclose information communicated to the licensee by the client relating to 25.30and in connection with services rendered to the client by the licensee. Nothing in this 25.31section may be construed to prohibit: 25.32(1) the disclosure of information required to be disclosed by the standards of the 25.33public accounting profession in reporting on the examination of financial statements; or 25.34(2) disclosures in court proceedings, in investigations or proceedings under section 25.35326A.08 , in ethical investigations conducted by private professional organizations, in the 26.1course of peer reviews, to other persons active in the organization performing services for 26.2that client on a need-to-know basis, or to persons in the entity who need this information 26.3for the sole purpose of assuring quality control. 26.4(b) This section also applies to persons registered under section 326A.06, paragraph 26.5(b) new text begin , and to persons granted a practice privilege under section 326A.14 new text end . 26.6    Sec. 30. Minnesota Statutes 2006, section 326A.13, is amended to read: 26.7326A.13 WORKING PAPERS; CLIENTS' RECORDS. 26.8(a) Subject to the provisions of section 326A.12, all statements, records, schedules, 26.9working papers, and memoranda made by a licensee or a partner, shareholder, officer, 26.10director, member, manager, or employee of a licensee, incident to, or in the course of, 26.11rendering services to a client while a licensee, except the reports submitted by the licensee 26.12to the client and except for records that are part of the client's records, remain the property 26.13of the licensee in the absence of an express agreement between the licensee and the 26.14client to the contrary. No statement, record, schedule, working paper, or memorandum 26.15may be sold, transferred, or bequeathed, without the consent of the client or the client's 26.16personal representative or assignee, to anyone other than one or more surviving partners, 26.17stockholders, members or new partners, new stockholders, new members of the licensee, 26.18or any combined or merged firm or successor in interest to the licensee. Nothing in this 26.19section may be construed as prohibiting any temporary transfer of workpapers or other 26.20material necessary in the course of carrying out peer reviews or as otherwise interfering 26.21with the disclosure of information pursuant to section 326A.12. 26.22(b) A licensee shall furnish to a client or former client, upon request and reasonable 26.23notice: 26.24(1) a copy of the licensee's working papers, to the extent that the working papers 26.25include records that would ordinarily constitute part of the client's records and are not 26.26otherwise available to the client; and 26.27(2) any accounting or other records belonging to, or obtained from or on behalf of, 26.28the client that the licensee removed from the client's premises or received for the client's 26.29account. The licensee may make and retain copies of such documents of the client when 26.30they form the basis for work done by the licensee. 26.31(c) Nothing in this section requires a licensee to keep any work paper beyond the 26.32period prescribed in any other applicable statute. 26.33(d) This section also applies to persons registered under section 326A.06, paragraph 26.34(b) new text begin , and to persons granted a practice privilege under section 326A.14 new text end . 27.1    Sec. 31. Minnesota Statutes 2006, section 326A.14, is amended to read: 27.2326A.14 SUBSTANTIAL EQUIVALENCY. 27.3    Subdivision 1. Requirements. (a) An individual whose principal place of business 27.4is not in this state and who has new text begin holds new text end a valid certificate or license new text begin in good standing new text end as 27.5a certified public accountant from any state which, upon verification, is in substantial 27.6equivalence with the certified public accountant licensure requirements of this chapter 27.7 new text begin section 326A.03, subdivisions 3, 4, and 6, new text end shall be presumed to have qualifications 27.8substantially equivalent to this state's requirements and shall have all the privileges of 27.9certificate holders and licensees of this state without the need to obtain a certificate 27.10or permit new text begin license new text end . However, such individuals shall notify the board of their intent to 27.11enter the state under this provision as provided for in board rule and pay the required 27.12fee. new text begin Notwithstanding any contrary provision of this chapter, an individual who offers new text end 27.13 new text begin or renders professional services, whether in person, by mail, telephone, or electronic new text end 27.14 new text begin means, under this paragraph: (1) shall be granted practice privileges in this state; (2) is new text end 27.15 new text begin subject to the requirements in paragraph (c); and (3) is not required to provide any notice new text end 27.16 new text begin or other submission. new text end 27.17(b) An individual whose principal place of business is not in this state and who has 27.18 new text begin holds new text end a valid certificate or license new text begin in good standing new text end as a certified public accountant from 27.19any state whose certified public accountant licensure qualifications, upon verification, 27.20are not substantially equivalent with the licensure requirements of this chapter new text begin section new text end 27.21 new text begin 326A.03, subdivisions 3, 4, and 6, new text end shall be presumed to have qualifications substantially 27.22equivalent to this state's requirements and shall have all the privileges of certificate 27.23holders and licensees of this state without the need to obtain a certificate or permit new text begin license new text end 27.24if the individual obtains verification, as specified in board rule, that the individual's 27.25qualifications are substantially equivalent to the licensure requirements of this chapter new text begin new text end 27.26 new text begin section 326A.03, subdivisions 3, 4, and 6 new text end . Such individuals shall notify the board of their 27.27intent to enter the state under this provision as provided for in board rule and pay the 27.28required fee. new text begin For purposes of this paragraph, any individual who passed the Uniform CPA new text end 27.29 new text begin Examination and holds a valid license issued by any other state prior to January 1, 2009, is new text end 27.30 new text begin exempt from the education requirement in section 326A.03, subdivision 6, paragraph (a), new text end 27.31 new text begin provided the individual meets the education requirement in section 326A.03, subdivision new text end 27.32 new text begin 3. Notwithstanding any contrary provision of this chapter, an individual who offers or new text end 27.33 new text begin renders professional services, whether in person, by mail, telephone, or electronic means, new text end 27.34 new text begin under this paragraph: (1) shall, after the verification specified by adopted rules, be granted new text end 27.35 new text begin practice privileges in this state; (2) is subject to the requirements in paragraph (c); and (3) new text end 27.36 new text begin is not required to provide any notice or other submission. new text end 28.1(c) Any new text begin An individual new text end licensee of another state exercising the privilege afforded 28.2under this section consents new text begin and the firm which employs that licensee are deemed to have new text end 28.3 new text begin consented new text end , as a condition of the grant of this privilege: 28.4(1) to the personal and subject matter jurisdiction and disciplinary authority of 28.5the board; 28.6(2) to comply with this chapter and the board's rules; and 28.7(3) to the appointment of the state board that issued the license as the licensee's 28.8agent upon whom process may be served in any action or proceeding by this board 28.9against the licensee. new text begin ; and new text end 28.10 new text begin (4) to cease offering or rendering professional services in this state individually and new text end 28.11 new text begin on behalf of a firm in the event the license issued by the state of the individual's principal new text end 28.12 new text begin place of business is no longer valid or in good standing. new text end 28.13 new text begin (d) An individual who has been granted practice privileges under this section who new text end 28.14 new text begin performs attest services as defined in section 326A.01, subdivision 2, clause (1), (3), or new text end 28.15 new text begin (4), for any entity with its headquarters in this state, may only do so through a firm which new text end 28.16 new text begin has obtained a permit under section 326A.05. new text end 28.17    Subd. 2. Use of title in another state. A licensee of this state offering or rendering 28.18services or using the CPA title in another state is subject to the same disciplinary action in 28.19this state for which the licensee would be subject to discipline for an act committed in the 28.20other state. The board shall investigate any complaint made by the board of accountancy 28.21of another state. 28.22    Sec. 32. new text begin REPEALER. new text end 28.23 new text begin Minnesota Statutes 2006, section 326A.05, subdivision 9, new text end new text begin is repealed. new text end 28.24    Sec. 33. new text begin EFFECTIVE DATE. new text end 28.25 new text begin Sections 1 to 32 are effective the day following final enactment. new text end