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                            CHAPTER 109-S.F.No. 859 
                  An act relating to professions; creating the 
                  Accountancy Act of 2001; authorizing rulemaking; 
                  imposing penalties; amending Minnesota Statutes 2000, 
                  sections 3.972, subdivision 1; 116J.70, subdivision 
                  2a; 214.01, subdivision 3; 319B.02, subdivision 19; 
                  326.53; 367.36, subdivision 1; 412.222; 471.49, 
                  subdivision 10; and 544.42, subdivision 1; proposing 
                  coding for new law as Minnesota Statutes, chapter 
                  326A; repealing Minnesota Statutes 2000, sections 
                  326.165; 326.1655; 326.17; 326.18; 326.19; 326.192; 
                  326.197; 326.20; 326.201; 326.211; 326.212; 326.22; 
                  326.223; 326.224; 326.228; and 326.229. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                   ARTICLE 1 
                           REGULATION OF ACCOUNTANCY 
           Section 1.  [TITLE.] 
           This act may be cited as the "Accountancy Act of 2001." 
           Sec. 2.  [PURPOSE.] 
           It is the policy of this state, and the purpose of this 
        act, to promote the reliability of information that is used for 
        guidance in financial transactions or for accounting for, or 
        assessing the financial status or performance of, commercial, 
        noncommercial, and governmental enterprises.  The public 
        interest requires that persons professing special competence in 
        accountancy or offering assurance as to the reliability or 
        fairness of presentation of such information must have 
        demonstrated their qualifications to do so, and that persons who 
        have not demonstrated and maintained such qualifications, not be 
        permitted to represent themselves as having such special 
        competence or to offer such assurance; that the conduct of 
        persons licensed or registered as having special competence in 
        accountancy be regulated in all aspects of their professional 
        work; that a public authority competent to prescribe and assess 
        the qualifications and to regulate the conduct of licensees and 
        registrants be established; and that the use of titles that have 
        a capacity or tendency to deceive the public as to the status or 
        competence of the persons using such titles be prohibited. 
           Sec. 3.  [326A.01] [DEFINITIONS.] 
           Subdivision 1.  [SCOPE.] When used in this chapter, the 
        terms in this section have the meanings given. 
           Subd. 2.  [ATTEST.] "Attest" means to provide the following 
        financial statement services: 
           (1) an audit or other engagement performed in accordance 
        with the Statements on Auditing Standards (SAS); 
           (2) a review of a financial statement performed in 
        accordance with the Statements on Standards for Accounting and 
        Review Services (SSARS); and 
           (3) an examination of prospective financial information 
        performed in accordance with the Statements on Standards for 
        Attestation Engagements (SSAE). 
           Subd. 3.  [BOARD.] "Board" means the Minnesota board of 
        accountancy established under section 326A.02 or its predecessor 
        under prior law. 
           Subd. 4.  [CERTIFICATE.] "Certificate" means a certificate 
        as a certified public accountant issued under section 326A.04, 
        or corresponding provisions of prior law, or a corresponding 
        certificate as certified public accountant issued after 
        examination under the law of any other state. 
           Subd. 5.  [CLIENT.] "Client" means a person or entity that 
        agrees with a licensee, a person registered under section 
        326A.06, paragraph (b), or the person's or licensee's employers 
        to receive any professional service. 
           Subd. 6.  [COMPILATION.] "Compilation" means the provision 
        of a service performed in accordance with Statements on 
        Standards for Accounting and Review Services (SSARS) that 
        presents in the form of financial statements information that is 
        the representation of management or owners without undertaking 
        to express any assurance on the statements. 
           Subd. 7.  [CPA FIRM.] "CPA Firm" means a sole 
        proprietorship, a corporation, a partnership, or any other form 
        of organization issued a permit under section 326A.05. 
           Subd. 8.  [LICENSE.] "License" means a certificate issued 
        under section 326A.04, a permit issued under section 326A.05, or 
        a certificate or permit issued under corresponding provisions of 
        prior law. 
           Subd. 9.  [LICENSEE.] "Licensee" means the holder of a 
        license. 
           Subd. 10.  [MANAGER.] "Manager" means a manager of a 
        limited liability company. 
           Subd. 11.  [MEMBER.] "Member" means a member of a limited 
        liability company. 
           Subd. 12.  [PEER REVIEW.] "Peer review" means a study, 
        appraisal, or review of one or more aspects of the professional 
        work of a certificate holder or CPA firm that performs attest or 
        compilation services, or the professional work of a person 
        registered under section 326A.06, paragraph (b), by a person or 
        persons who hold certificates and who are not affiliated with 
        the certificate holder, CPA firm, or person being reviewed. 
           Subd. 13.  [PERMIT.] "Permit" means a permit to practice as 
        a CPA firm issued under section 326A.05, or corresponding 
        provisions of prior law, or under corresponding provisions of 
        the laws of other states. 
           Subd. 14.  [PROFESSIONAL.] "Professional" means arising out 
        of or related to the specialized knowledge or skills associated 
        with certified public accountants or persons registered under 
        section 326A.06, paragraph (b). 
           Subd. 15.  [REPORT.] "Report," when used with reference to 
        financial statements, means an opinion, report, or other form of 
        language that states or implies assurance as to the reliability 
        of any financial statements and that also includes or is 
        accompanied by a statement or implication that the person or 
        firm issuing it has special knowledge or competence in 
        accounting or auditing.  Such a statement or implication of 
        special knowledge or competence may arise from use by the issuer 
        of the report of names or titles indicating that the person or 
        firm is an accountant or auditor, or from the language of the 
        report itself.  The term "report" includes any form of language 
        that disclaims an opinion when the form of language is 
        conventionally understood to imply any positive assurance as to 
        the reliability of the financial statements referred to or 
        special competence on the part of the person or firm issuing the 
        language.  It includes any other form of language that is 
        conventionally understood to imply such assurance or such 
        special knowledge or competence. 
           Subd. 16.  [STATE.] "State" means any state of the United 
        States, the District of Columbia, Puerto Rico, the U.S. Virgin 
        Islands, and Guam; except that "this state" means the state of 
        Minnesota. 
           Subd. 17.  [SUBSTANTIAL EQUIVALENCY.] "Substantial 
        equivalency" is a determination under section 326A.14 by the 
        board of accountancy or its designee that the education, 
        examination, and experience requirements contained in the 
        statutes and administrative rules of another jurisdiction are 
        comparable to, or exceed the education, examination, and 
        experience requirements contained in this chapter or that an 
        individual CPA's education, examination, and experience 
        qualifications are comparable to or exceed the education, 
        examination, and experience requirements contained in this 
        chapter. 
           Sec. 4.  [326A.02] [STATE BOARD OF ACCOUNTANCY.] 
           Subdivision 1.  [BOARD.] A board of accountancy is created 
        to carry out the purposes and enforce the provisions of this 
        chapter.  It consists of nine citizens of this state appointed 
        by the governor.  Two must be public members as defined by 
        section 214.02, and seven must be certified public accountants 
        under the provisions of this chapter.  Effective January 1, 
        2003, no fewer than five of the certified public accountants 
        must be owners or employees of a CPA firm that holds a current 
        permit and provides professional services at the time of 
        appointment and reappointment.  At least two of the seven 
        certified public accountants at the time of appointment and 
        reappointment must be owners or employees of a CPA firm that: 
           (1) holds a current permit; 
           (2) provides professional services; and 
           (3) consists of ten or fewer certified public accountants. 
           Subd. 2.  [MEMBERSHIP CONDITIONS.] Membership terms, 
        compensation of members, removal of members, the filling of 
        membership vacancies, and fiscal year and reporting requirements 
        are as provided in sections 214.07 to 214.09.  The provision of 
        staff, administrative services, and office space; the review and 
        processing of complaints; the setting of board fees; and other 
        provisions relating to board operations shall be as provided in 
        this chapter and chapter 214. 
           Any member of the board whose certificate under section 
        326A.04 is revoked or suspended automatically ceases to be a 
        member of the board. 
           Subd. 3.  [OFFICERS; PROCEEDINGS.] The board shall elect 
        one of its number as chair, another as vice-chair, and another 
        as secretary and treasurer.  The officers shall hold their 
        respective offices for a term of one year and until their 
        successors are elected.  The affirmative vote of a majority of 
        the qualified members of the board is considered the action of 
        the board.  The board shall meet at such times and places as may 
        be fixed by the board.  Meetings of the board are subject to 
        chapter 13D.  A majority of the board members then in office 
        constitutes a quorum at any meeting duly called.  The board 
        shall have a seal, which must be judicially noticed.  The board 
        shall retain or arrange for the retention of all applications 
        and all documents under oath that are filed with the board and 
        also records of its proceedings, and it shall maintain a 
        registry of the names and addresses of all licensees and 
        registrants under this chapter.  In any proceeding in court, 
        civil or criminal, arising out of or founded upon any provision 
        of this chapter, copies of records of the proceeding certified 
        as true copies under the seal of the boards shall be admissible 
        in evidence as tending to prove the contents of the records. 
           Subd. 4.  [POWERS.] The board may issue subpoenas to compel 
        the attendance of witnesses and the production of documents, to 
        administer oaths, to take testimony, to cooperate with the 
        appropriate authorities in other states in investigation and 
        enforcement concerning violations of this chapter and comparable 
        acts of other states, and to receive evidence concerning all 
        matters within the scope of this chapter.  In case of 
        disobedience of a subpoena, the board may invoke the aid of any 
        court in requiring the attendance and testimony of witnesses and 
        the production of documentary evidence.  The board, its members, 
        and its agents are immune from personal liability for actions 
        taken in good faith in the discharge of the board's 
        responsibilities, and the state shall hold the board, its 
        members, and its agents harmless from all costs, damages, and 
        attorneys' fees arising from claims and suits against them with 
        respect to matters to which such immunity applies.  The board 
        shall enforce the standard of general education, the standard of 
        special education in the science and art of accounting, and the 
        standard of good character and general experience, as prescribed 
        in this chapter. 
           Subd. 5.  [RULES.] The board may adopt rules governing its 
        administration and enforcement of this chapter and the conduct 
        of licensees and persons registered under section 326A.06, 
        paragraph (b), including: 
           (1) rules governing the board's meetings and the conduct of 
        its business; 
           (2) rules of procedure governing the conduct of 
        investigations and hearings and discipline by the board; 
           (3) rules specifying the educational and experience 
        qualifications required for the issuance of certificates and the 
        continuing professional education required for renewal of 
        certificates; 
           (4) rules of professional conduct directed to controlling 
        the quality and probity of services by licensees, and dealing 
        among other things with independence, integrity, and 
        objectivity; competence and technical standards; and 
        responsibilities to the public and to clients; 
           (5) rules governing the professional standards applicable 
        to licensees including adoption of the statements on standards 
        specified in section 326A.01, subdivision 2, and as developed 
        for general application by recognized national accountancy 
        organizations such as the American Institute of Certified Public 
        Accountants; 
           (6) rules governing the manner and circumstances of use of 
        the titles "certified public accountant," "CPA," "registered 
        accounting practitioner," and "RAP"; 
           (7) rules regarding peer review that may be required to be 
        performed under provisions of this chapter; 
           (8) rules on substantial equivalence to implement section 
        326A.14; 
           (9) rules regarding the conduct of the certified public 
        accountant examination; 
           (10) rules regarding the issuance and renewals of 
        certificates, permits, and registrations; 
           (11) rules regarding transition provisions to implement 
        this chapter; 
           (12) rules specifying the educational and experience 
        qualifications for registration, rules of professional conduct, 
        rules regarding peer review, rules governing standards for 
        providing services, and rules regarding the conduct and content 
        of examination for those persons registered under section 
        326A.06, paragraph (b); and 
           (13) rules regarding fees for examinations, certificate 
        issuance and renewal, firm permits, registrations under section 
        326A.06, paragraph (b), notifications made under section 
        326A.14, and late processing fees. 
           Subd. 6.  [COMPLAINT COMMITTEE.] The board shall establish 
        a complaint committee to investigate, mediate, or initiate 
        administrative or legal proceedings on behalf of the board with 
        respect to complaints filed with or information received by the 
        board alleging or indicating violations of this chapter.  The 
        complaint committee shall consist of three members of the board. 
           Subd. 7.  [EXPENSES OF ADMINISTRATION.] The expenses of 
        administering this chapter must be paid from appropriations made 
        to the board. 
           Sec. 5.  [326A.03] [QUALIFICATIONS FOR A CERTIFICATE AS A 
        CERTIFIED PUBLIC ACCOUNTANT.] 
           Subdivision 1.  [QUALIFICATIONS.] The certificate of 
        certified public accountant shall be granted to persons of good 
        moral character who meet the education, experience, and 
        examination requirements of this section and rules adopted under 
        it and who apply under section 326A.04. 
           Good moral character for purposes of this section means 
        lack of a history of dishonest or felonious acts.  The board may 
        refuse to grant a certificate on the ground of failure to 
        satisfy this requirement only if there is a substantial 
        connection between the lack of good moral character of the 
        applicant and the professional responsibilities of a licensee 
        and if the finding by the board of lack of good moral character 
        is supported by clear and convincing evidence.  When an 
        applicant is found to be unqualified for a certificate because 
        of a lack of good moral character, the board shall furnish the 
        applicant a statement containing the findings of the board, a 
        complete record of the evidence upon which the determination was 
        based, and a notice of the applicant's right of appeal. 
           Subd. 2.  [EDUCATIONAL AND EXPERIENCE REQUIREMENTS TO TAKE 
        EXAMINATION BEFORE JULY 1, 2006.] Until July 1, 2006, the 
        examination must be administered by the board only to a 
        candidate who: 
           (1) holds a master's degree with a major in accounting from 
        a college or university that is fully accredited by a recognized 
        accrediting agency listed with the United States Department of 
        Education; 
           (2) holds a baccalaureate degree, with a major in 
        accounting, from a college or university that is fully 
        accredited by a recognized accrediting agency listed with the 
        United States Department of Education or who has in the opinion 
        of the board at least an equivalent education; 
           (3) holds a baccalaureate degree from a college or 
        university that is fully accredited by a recognized accrediting 
        agency listed with the United States Department of Education, or 
        who has in the opinion of the board at least an equivalent 
        education, provided that at least one year of experience of the 
        type specified in subdivision 8 has been completed; 
           (4) provides evidence of having completed two or more years 
        of study with a passing grade average or above from a college, 
        university, technical college, or a Minnesota licensed private 
        school that is fully accredited by a recognized accrediting 
        agency listed with the United States Department of Education, or 
        who has in the opinion of the board at least an equivalent 
        education, provided that at least three years experience of the 
        type specified in subdivision 8 has been completed; or 
           (5) holds a diploma as a graduate of an accredited high 
        school, or who has in the opinion of the board at least an 
        equivalent education, provided that at least five years 
        experience of the type specified in subdivision 8 has been 
        completed. 
           Subd. 3.  [EDUCATIONAL REQUIREMENTS TO TAKE EXAMINATION ON 
        OR AFTER JULY 1, 2006.] On or after July 1, 2006, the 
        examination must be administered by the board only to a 
        candidate who has a baccalaureate or higher degree, with a major 
        in accounting or a major in business with accounting emphasis, 
        or an equivalent education, from a college or university that is 
        fully accredited by a recognized accrediting agency listed with 
        the United States Department of Education or an equivalent 
        accrediting association. 
           Subd. 4.  [EXAMINATION REQUIREMENTS.] (a) The examination 
        required to be passed as a condition for the granting of a 
        certificate must be held as often as convenient, in the opinion 
        of the board, and must test the applicant's knowledge of the 
        subjects of accounting and auditing, and other related subjects 
        that the board may specify by rule, including but not limited to 
        business law and taxation.  The time for holding the examination 
        must be determined by the board and may be changed from time to 
        time.  The board shall prescribe by rule the methods of applying 
        for and conducting the examination, including methods for 
        grading and determining a passing grade required of an applicant 
        for a certificate.  However, the board shall to the extent 
        possible ensure that the examination itself, grading of the 
        examination, and the passing grades, are uniform with those 
        applicable in all other states.  The board may make such use of 
        all or any part of the Uniform Certified Public Accountant 
        Examination and Advisory Grading Service of the American 
        Institute of Certified Public Accountants and may contract with 
        third parties to perform administrative services with respect to 
        the examination that it considers appropriate to assist it in 
        performing its duties under this paragraph. 
           (b) The board may charge, or provide for a third party 
        administering the examination to charge, each applicant a fee. 
           Subd. 5.  [EXPERIENCE REQUIREMENTS FOR CERTIFICATE BEFORE 
        JULY 1, 2006.] Until July 1, 2006, those persons who have passed 
        the examination required by this section and who meet all other 
        requirements for a certificate, including payment of required 
        fees, must be granted certificates as certified public 
        accountants, providing that they have completed the following 
        experience requirements of the type specified in subdivision 8 
        in addition to any experience already required in subdivision 2: 
           (1) for those whose educational qualifications meet the 
        requirements of subdivision 2, clause (1), the experience 
        requirement is one year; 
           (2) for those whose educational qualifications meet the 
        requirements of subdivision 2, clause (2), the experience 
        requirement is two years; 
           (3) for those whose educational and experience 
        qualifications meet the requirements of subdivision 2, clause 
        (3), the additional required experience is two years; 
           (4) for those whose educational and experience 
        qualifications meet the requirements of subdivision 2, clause 
        (4), the additional required experience is two years; and 
           (5) for those whose educational and experience 
        qualifications meet the requirements of subdivision 2, clause 
        (5), the additional required experience is one year. 
           Subd. 6.  [EXPERIENCE AND EDUCATIONAL REQUIREMENTS FOR 
        CERTIFICATE ON OR AFTER JULY 1, 2006.] (a) On or after July 1, 
        2006, those persons who have passed the examination required in 
        this section must be granted certificates as certified public 
        accountants provided they certify to the board that they have 
        completed at least 150 semester or 225 quarter hours at a 
        college or university that is fully accredited by a recognized 
        accrediting agency listed with the United States Department of 
        Education, or an equivalent accrediting association, and have 
        completed at least one year of experience of the type specified 
        in paragraph (b). 
           (b) An applicant for initial issuance of a certificate 
        under this subdivision shall show that the applicant has had one 
        year of experience.  Acceptable experience includes providing 
        any type of service or advice involving the use of accounting, 
        attest, compilation, management advisory, financial advisory, 
        tax, or consulting skills, as verified by a licensee and meeting 
        requirements prescribed by the board by rule.  Acceptable 
        experience may be gained through employment in government, 
        industry, academia, or public practice.  Experience as an 
        auditor in the office of the legislative auditor or state 
        auditor, as verified by a licensee, shall be acceptable 
        experience. 
           Subd. 7.  [EQUIVALENT EDUCATION CRITERIA.] The board, in 
        consultation with the University of Minnesota, the Minnesota 
        state colleges and universities, private colleges, and private 
        career schools regulated under chapter 141, shall establish 
        criteria to assess equivalent education for purposes of 
        subdivision 3. 
           Subd. 8.  [QUALIFYING EXPERIENCE UNTIL JULY 1, 2006.] Until 
        July 1, 2006, qualifying experience includes public accounting 
        experience: 
           (1) as a staff employee of a certified public accountant, 
        or a firm; 
           (2) as an auditor in the office of the legislative auditor 
        or state auditor, or as an auditor of examiner with any other 
        agency of government, if the experience, in the opinion of the 
        board, is equally comprehensive and diversified; 
           (3) as a self-employed public accountant or as a partner in 
        a firm; or 
           (4) in any combination of the foregoing capacities. 
           Sec. 6.  [326A.04] [ISSUANCE AND RENEWAL OF CERTIFICATES, 
        AND MAINTENANCE OF COMPETENCY.] 
           Subdivision 1.  [ELIGIBILITY.] The board shall grant or 
        renew certificates to persons who make application and 
        demonstrate: 
           (1) that their qualifications, including where applicable 
        the qualifications prescribed by section 326A.03, are in 
        accordance with this section; or 
           (2) that they are eligible under the substantial 
        equivalency standard in section 326A.14, subdivision 1, 
        paragraph (b), which requires licensure for those certified 
        public accountants who establish their principal places of 
        business in another state.  The holder of a certificate issued 
        under this section may only provide attest services in a CPA 
        firm that holds a permit issued under section 326A.05. 
           Subd. 2.  [TIMING.] (a) Certificates must be initially 
        issued and renewed for periods of not more than one year but in 
        any event must expire on the December 31 following issuance or 
        renewal.  Applications for certificates must be made in the 
        form, and in the case of applications for renewal between the 
        dates, specified by the board in rule.  The board shall grant or 
        deny an application no later than 90 days after the application 
        is filed in proper form.  If the applicant seeks the opportunity 
        to show that issuance or renewal of a certificate was mistakenly 
        denied, or if the board is unable to determine whether it should 
        be granted or denied, the board may issue to the applicant a 
        provisional certificate that expires 90 days after its issuance, 
        or when the board determines whether or not to issue or renew 
        the certificate for which application was made, whichever occurs 
        first. 
           (b) Certificate holders who do not provide professional 
        services and do not use the certified public accountant 
        designation in any manner are not required to renew their 
        certificates provided they have notified the board as provided 
        in board rule and comply with the requirements for nonrenewal as 
        specified in board rule. 
           Subd. 3.  [RESIDENTS OF OTHER STATES.] (a) With regard to 
        applicants who do not qualify for reciprocity under the 
        substantial equivalency standard in section 326A.14, subdivision 
        1, paragraph (b), the board shall issue a certificate to a 
        holder of a certificate, license, or permit issued by another 
        state upon a showing that: 
           (1) the applicant passed the examination required for 
        issuance of the applicant's certificate with grades that would 
        have been passing grades at the time in this state; 
           (2) the applicant had four years of experience outside of 
        this state of the type described in section 326A.03, subdivision 
        6, paragraph (b), if application is made on or after July 1, 
        2006, or section 326A.03, subdivision 8, if application is made 
        before July 1, 2006; or the applicant meets equivalent 
        requirements prescribed by the board by rule, after passing the 
        examination upon which the applicant's certificate was based and 
        within the ten years immediately preceding the application; and 
           (3) if the applicant's certificate, license, or permit was 
        issued more than four years prior to the application for 
        issuance of an initial certificate under this subdivision, that 
        the applicant has fulfilled the requirements of continuing 
        professional education that would have been applicable under 
        subdivision 4. 
           (b) As an alternative to the requirements of paragraph (a), 
        a certificate holder licensed by another state who establishes a 
        principal place of business in this state shall request the 
        issuance of a certificate from the board prior to establishing 
        the principal place of business.  The board shall issue a 
        certificate to the person if the person's individual certified 
        public accountant qualifications, upon verification, are 
        substantially equivalent to the certified public accountant 
        licensure requirements of this chapter. 
           Subd. 4.  [PROGRAM OF LEARNING.] For renewal of a 
        certificate under this section, each licensee shall participate 
        in a program of learning designed to maintain professional 
        competency.  The program of learning must comply with rules 
        adopted by the board.  The board may by rule create an exception 
        to this requirement for licensees who do not perform or offer to 
        perform for the public one or more kinds of services involving 
        the use of accounting or auditing skills, including issuance of 
        reports on financial statements or of one or more kinds of 
        management advisory, financial advisory or consulting services, 
        or the preparation of tax returns or the furnishing of advice on 
        tax matters.  A licensee granted such an exception by the board 
        must place the word "inactive" adjacent to the CPA title on any 
        business card, letterhead, or any other document or device, with 
        the exception of the licensee's certificate on which the CPA 
        title appears. 
           Subd. 5.  [FEE.] The board shall charge a fee for each 
        application for initial issuance or renewal of a certificate 
        under this section. 
           Subd. 6.  [OTHER STATE LICENSES.] Applicants for initial 
        issuance or renewal of certificates under this section shall in 
        their applications list all states in which they have applied 
        for or hold certificates, licenses, or permits and list any past 
        denial, revocation, or suspension of a certificate, license, or 
        permit.  Each holder of or applicant for a certificate under 
        this section shall notify the board in writing, within 30 days 
        after its occurrence, of any issuance, denial, revocation, or 
        suspension of a certificate, license, or permit by another state.
           Subd. 7.  [CERTIFICATES ISSUED BY FOREIGN COUNTRIES.] The 
        board shall issue a certificate to a holder of a substantially 
        equivalent foreign country designation, provided that: 
           (1) the foreign authority that granted the designation 
        makes similar provision to allow a person who holds a valid 
        certificate issued by this state to obtain the foreign 
        authority's comparable designation; 
           (2) the foreign designation: 
           (i) was duly issued by a foreign authority that regulates 
        the practice of public accountancy and the foreign designation 
        has not expired or been revoked or suspended; 
           (ii) entitles the holder to issue reports upon financial 
        statements; and 
           (iii) was issued upon the basis of educational, 
        examination, and experience requirements established by the 
        foreign authority or by law; and 
           (3) the applicant: 
           (i) received the designation, based on educational and 
        examination standards substantially equivalent to those in 
        effect in this state, at the time the foreign designation was 
        granted; 
           (ii) has, within the ten years immediately preceding the 
        application, completed an experience requirement that is 
        substantially equivalent to the requirement in section 326A.03, 
        subdivision 6, paragraph (b), if application is made on or after 
        July 1, 2006, or section 326A.03, subdivision 8, if application 
        is made before July 1, 2006, in the jurisdiction that granted 
        the foreign designation; completed four years of professional 
        experience in this state; or met equivalent requirements 
        prescribed by the board by rule; and 
           (iii) passed a uniform qualifying examination in national 
        standards and an examination on the laws, regulations, and code 
        of ethical conduct in effect in this state acceptable to the 
        board. 
           Subd. 8.  [OTHER JURISDICTIONS IN WHICH FOREIGN APPLICANT 
        IS LICENSED.] An applicant under subdivision 7 shall in the 
        application list all jurisdictions, foreign and domestic, in 
        which the applicant has applied for or holds a designation to 
        practice public accountancy.  Each holder of a certificate 
        issued under subdivision 7 shall notify the board in writing, 
        within 30 days after its occurrence, of any issuance, denial, 
        revocation, or suspension of a designation or commencement of a 
        disciplinary or enforcement action by any jurisdiction. 
           Subd. 9.  [APPLICATION BY FOREIGN CERTIFICATE HOLDER.] The 
        board has the sole authority to interpret the application of the 
        provisions of subdivisions 7 and 8. 
           Subd. 10.  [PEER REVIEW.] The board shall by rule require 
        as a condition for renewal of a certificate under this section 
        by any certificate holder who performs compilation services for 
        the public other than through a CPA firm, that the individual 
        undergo, no more frequently than once every three years, a peer 
        review conducted in a manner specified by the board in rule.  
        The review shall include verification that the individual has 
        met the competency requirements set out in professional 
        standards for the services described in this subdivision as set 
        forth by rule. 
           Subd. 11.  [AUTOMATIC REVOCATION.] The certificates of 
        persons who fail to renew their certificates for more than two 
        years after expiration shall be automatically revoked by order 
        of the board.  The orders may be issued by the board without 
        following the procedures of chapter 14, provided the board 
        notifies each such person by mail at the person's last known 
        address on file with the board at least three days prior to the 
        issuance of any such order.  No notice is required if the last 
        communication sent by the board to a licensee was returned to 
        the board by the United States Postal Service as undeliverable 
        and with no forwarding address.  Certificates so revoked by the 
        board may be reinstated, if at all, under section 326A.09.  This 
        subdivision does not apply to certified public accountants who 
        have notified the board that they will not use the CPA 
        designation in any manner and will not provide professional 
        services. 
           Sec. 7.  [326A.05] [CPA FIRM PERMITS TO PRACTICE, ATTEST 
        AND COMPILATION COMPETENCY, AND PEER REVIEW.] 
           Subdivision 1.  [GENERAL.] The board shall grant or renew 
        permits to practice as a CPA firm to entities that make 
        application and demonstrate their qualifications in accordance 
        with this section.  A firm must hold a permit issued under this 
        section in order to provide attest services or to use the title 
        "CPAs" or "CPA firm." 
           Subd. 2.  [TIMING.] Permits must be initially issued and 
        renewed for periods of not more than one year but in any event 
        must expire on December 31 following issuance or renewal.  
        Applications for permits shall be made in the form, and in the 
        case of applications for renewal between the dates, as the board 
        specifies in rule.  The board shall grant or deny an application 
        no later than 90 days after the application is filed in proper 
        form.  If the applicant seeks the opportunity to show that 
        issuance or renewal of a permit was mistakenly denied or if the 
        board is not able to determine whether it should be granted or 
        denied, the board may issue to the applicant a provisional 
        permit, which expires 90 days after its issuance, or when the 
        board determines whether or not to issue or renew the permit for 
        which application was made, whichever occurs first. 
           Subd. 3.  [QUALIFICATIONS.] (a) An applicant for initial 
        issuance or renewal of a permit to practice under this section 
        shall comply with the requirements in this subdivision. 
           (b) Notwithstanding chapter 319B or any other provision of 
        law, a simple majority of the ownership of the firm, in terms of 
        financial interests and voting rights of all partners, officers, 
        shareholders, members, or managers, must belong to holders of 
        certificates who are licensed in some state, and the partners, 
        officers, shareholders, members, or managers, whose principal 
        place of business is in this state, and who perform professional 
        services in this state, must hold valid certificates issued 
        under section 326A.04 or the corresponding provision of prior 
        law.  Although firms may include nonlicensee owners, the firm 
        and its ownership must comply with rules adopted by the board.  
        The firm shall register all nonlicensee owners with the state 
        board as set forth by rule. 
           (c) A CPA firm may include nonlicensee owners provided that:
           (1) the firm designates a licensee of this state, who is 
        responsible for the proper registration of the firm and 
        identifies that individual to the board; 
           (2) all nonlicensee owners are active individual 
        participants in the CPA firm or affiliated entities; and 
           (3) the firm complies with other requirements imposed by 
        the board in rule. 
           (d) An individual licensee who is responsible for 
        supervising attest or compilation services and signs or 
        authorizes someone to sign the accountant's report on the 
        financial statements on behalf of the firm, shall meet the 
        competency requirements set out in the professional standards 
        for such services. 
           (e) An individual licensee who signs or authorizes someone 
        to sign the accountants' report on the financial statements on 
        behalf of the firm shall meet the competency requirement of 
        paragraph (d). 
           Subd. 4.  [INITIAL ISSUANCE OR RENEWAL.] An applicant for 
        initial issuance or renewal of a permit to practice under this 
        section shall register each office of the firm within this state 
        with the board and to show that all attest and compilation 
        services rendered in this state are under the charge of a person 
        holding a valid certificate, or the corresponding provision of 
        prior law. 
           Subd. 5.  [FEES.] The board shall charge a fee for each 
        application for initial issuance or renewal of a permit under 
        this section. 
           Subd. 6.  [OTHER JURISDICTIONS IN WHICH APPLICANT HOLDS A 
        PERMIT.] An applicant for initial issuance or renewal of permits 
        under this section shall in the applicant's application list all 
        states in which the applicant has applied for or holds permits 
        as a CPA firm and list any past denial, revocation, or 
        suspension of a permit by any other state.  Each holder of or 
        applicant for a permit under this section shall notify the board 
        in writing, within 30 days after its occurrence, of any change 
        in the identities of partners, officers, shareholders, members, 
        or managers whose principal place of business is in this state, 
        any change in the number or location of offices within this 
        state, any change in the identity of the persons in charge of 
        such offices, and any issuance, denial, revocation, or 
        suspension of a permit by any other state. 
           Subd. 7.  [CORRECTIVE ACTIONS, REVOCATION.] Firms that fall 
        out of compliance with the provisions of the section due to 
        changes in firm ownership or personnel, after receiving or 
        renewing a permit, shall take corrective action to bring the 
        firm back in to compliance as quickly as possible.  Failure to 
        bring the firm back into compliance within a reasonable period 
        as defined by the board rule shall result in the suspension or 
        revocation of the firm permit. 
           Subd. 8.  [PEER REVIEW; RULES.] (a) The board shall by rule 
        require as a condition to renewal of permits under this section, 
        that applicants undergo, no more frequently than once every 
        three years, peer reviews conducted in a manner specified by the 
        board.  The review must include a verification that individuals 
        in the firm who are responsible for supervising attest and 
        compilation services and who sign or authorize someone to sign 
        the accountant's report on the financial statements on behalf of 
        the firm meet the competency requirements set out in the 
        professional standards for such services.  In addition, the 
        rules must meet the requirements in paragraphs (b) to (d). 
           (b) The rules must be adopted reasonably in advance of the 
        time when they first become effective. 
           (c) The rules must include reasonable provision for 
        compliance by an applicant showing that it has, within the 
        preceding three years, undergone a peer review that is a 
        satisfactory equivalent to peer review generally required 
        pursuant to this subdivision. 
           (d) The rules must require, with respect to peer reviews 
        contemplated by paragraph (c), that they be subject to oversight 
        by an oversight body established or sanctioned by board rule.  
        This body shall periodically report to the board on the 
        effectiveness of the review program under its charge, and 
        provide to the board a listing of firms that have participated 
        in a peer review program that is satisfactory to the board. 
           (e) The rules must require, with respect to peer reviews 
        contemplated by paragraph (c), that the peer review processes be 
        operated and documents maintained in a manner designed to 
        preserve confidentiality, and that neither the board nor any 
        third party, other than the oversight body, has access to 
        documents furnished or generated in the course of the review.  
        The applicant shall submit to the board reports and letters 
        received at the conclusion of the peer review process as 
        provided for in board rule. 
           Subd. 9.  [COOPERATIVE AUDITING ORGANIZATION.] Any 
        cooperative auditing organization organized under chapter 308A 
        is qualified for a cooperative auditing service license and may 
        style itself as a licensed cooperative auditing service if: 
           (1) for a minimum of one year prior to July 1, 1979, it 
        rendered auditing or accounting of business analysis services to 
        its members only; and 
           (2) its managers in charge of offices maintained in this 
        state are certified public accountants of this state.  
           Cooperative auditing services shall comply with all 
        requirements imposed on CPA firms and the board's rules 
        governing firms. 
           Sec. 8.  [326A.06] [LICENSED PUBLIC ACCOUNTANTS AND 
        REGISTERED ACCOUNTING PRACTITIONERS.] 
           (a) All licensed public accountants (LPA) who are actively 
        licensed by the state board on December 31, 2002, shall be 
        issued a certified public accountant certificate.  LPA's are 
        those accountants who were eligible for licensure on July 1, 
        1979, under the law in effect on that date and who were issued a 
        license as a licensed public accountant by the board at that 
        time. 
           (b) By July 1, 2004, the board shall implement a voluntary 
        registration of accounting practitioners.  The board shall 
        prescribe by rule the limitations of practice, educational 
        preparation, examination, registration, fees, peer review, and 
        continuing education requirements for the registration.  The 
        board shall consult with the University of Minnesota, the 
        Minnesota state colleges and universities, the Minnesota 
        association of private post-secondary schools, the private 
        college council, the Minnesota association of public 
        accountants, and other organizations as appropriate in the 
        implementation of this section. 
           Sec. 9.  [326A.07] [APPOINTMENT OF SECRETARY OF STATE AS 
        AGENT.] 
           Application by a person or a firm not a resident of this 
        state for a certificate or a permit shall constitute appointment 
        of the secretary of state as the applicant's agent upon whom 
        process may be served in any action or proceeding against the 
        applicant arising out of any transaction or operation connected 
        with or incidental to services performed by the applicant while 
        a licensee within this state. 
           Sec. 10.  [326A.08] [ENFORCEMENT.] 
           Subdivision 1.  [BASIS FOR CONDUCTING INVESTIGATIONS.] If 
        the board, or the complaint committee if authorized by the 
        board, has a reasonable basis to believe that a person or firm 
        has engaged in or is about to engage in a violation of a 
        statute, rule, or order that the board has issued or is 
        empowered to enforce, the board, or the complaint committee if 
        authorized by the board, may proceed as described in this 
        section.  The board may, upon receipt of a complaint or other 
        information suggesting violations of this chapter or of the 
        rules of the board, conduct investigations to determine whether 
        there is reasonable basis to institute proceedings under this 
        section against any person or firm for such violations.  The 
        investigation is not a prerequisite to such proceedings in the 
        event that a determination can be made without investigation. 
           Subd. 2.  [HEARINGS CONDUCTED UNDER CHAPTER 14.] Except as 
        otherwise described in this section, all hearings shall be 
        conducted in accordance with chapter 14. 
           Subd. 3.  [LEGAL ACTION.] (a) When necessary to prevent an 
        imminent violation of a statute, rule, or order that the board 
        has issued or is empowered to enforce, the board, or the 
        complaint committee if authorized by the board, may bring an 
        action in the name of the state in the district court in Ramsey 
        county, when necessary to prevent imminent harm to the public, 
        or in any county in which jurisdiction is proper to enjoin the 
        act or practice and to enforce compliance with the statute, 
        rule, or order.  Upon a showing that a person or firm has 
        engaged in or is about to engage in an act or practice 
        constituting a violation of a statute, rule, or order that the 
        board has issued or is empowered to enforce, a permanent or 
        temporary injunction, restraining order, or other appropriate 
        relief shall be granted. 
           (b) For purposes of injunctive relief under this 
        subdivision, irreparable harm exists when the board shows that a 
        person or firm has engaged in or is about to engage in an act or 
        practice constituting a violation of a statute, rule, or order 
        that the board has issued or is empowered to enforce. 
           (c) Injunctive relief granted under paragraph (a) does not 
        relieve an enjoined person or firm from criminal prosecution 
        from a competent authority or from action by the board pursuant 
        to subdivisions 4 to 7 with respect to the person's or firm's 
        certificate, permit, registration, or practice privileges 
        granted under section 326A.14 or application for examination, 
        certificate, registration, permit, or renewal or notification 
        for practice privileges granted under section 326A.14. 
           Subd. 4.  [CEASE AND DESIST ORDERS.] (a) The board, or the 
        complaint committee if authorized by the board, may issue and 
        have served upon a certificate holder, a permit holder, a 
        registration holder, a person with practice privileges granted 
        under section 326A.14 who has previously been subject to a 
        disciplinary order by the board, or an unlicensed firm or person 
        an order requiring the person or firm to cease and desist from 
        the act or practice constituting a violation of the statute, 
        rule, or order.  The order must be calculated to give reasonable 
        notice of the rights of the person or firm to request a hearing 
        and must state the reasons for the entry of the order.  No order 
        may be issued until an investigation of the facts has been 
        conducted pursuant to section 214.10. 
           (b) Service of the order is effective when the order is 
        served on the person, firm, or counsel of record personally, or 
        by certified mail to the most recent address provided to the 
        board for the person, firm, or counsel of record. 
           (c) Unless otherwise agreed by the board, or the complaint 
        committee if authorized by the board, and the person or firm 
        requesting the hearing, the hearing must be held no later than 
        30 days after the request for the hearing is received by the 
        board. 
           (d) The administrative law judge shall issue a report 
        within 30 days of the close of the contested case hearing 
        record, notwithstanding Minnesota Rules, part 1400.8100, subpart 
        3.  Within 30 days after receiving the report and any exceptions 
        to it, the board shall issue a further order vacating, 
        modifying, or making permanent the cease and desist orders as 
        the facts require. 
           (e) If no hearing is requested within 30 days of service of 
        the order, the order becomes final and remains in effect until 
        it is modified or vacated by the board. 
           (f) If the person or firm to whom a cease and desist order 
        is issued fails to appear at the hearing after being duly 
        notified, the person or firm is in default and the proceeding 
        may be determined against that person or firm upon consideration 
        of the cease and desist order, the allegations of which may be 
        considered to be true. 
           (g) In lieu of or in addition to the order provided in 
        paragraph (a), the board may require the person or firm to 
        provide to the board a true and complete list of the person's or 
        firm's clientele so that they can, if deemed necessary, be 
        notified of the board's action.  Failure to do so, or to provide 
        an incomplete or inaccurate list, is an act discreditable. 
           Subd. 5.  [ACTIONS AGAINST PERSONS OR FIRMS.] (a) The board 
        may, by order, deny, refuse to renew, suspend, temporarily 
        suspend, or revoke the application, or practice privileges, 
        registration or certificate of a person or firm; censure or 
        reprimand the person or firm; prohibit the person or firm from 
        preparing tax returns or reporting on financial statements; 
        refuse to permit a person to sit for examination; or refuse to 
        release the person's examination grades if the board finds that 
        the order is in the public interest and that, based on a 
        preponderance of the evidence presented, the person or firm: 
           (1) has violated a statute, rule, or order that the board 
        has issued or is empowered to enforce; 
           (2) has engaged in conduct or acts that are fraudulent, 
        deceptive, or dishonest whether or not the conduct or acts 
        relate to performing or offering to perform professional 
        services, providing that the fraudulent, deceptive, or dishonest 
        conduct or acts reflect adversely on the person's or firm's 
        ability or fitness to provide professional services; 
           (3) has engaged in conduct or acts that are negligent or 
        otherwise in violation of the standards established by board 
        rule, where the conduct or acts relate to providing professional 
        services; 
           (4) has been convicted of, has pled guilty or nolo 
        contendere to or has been sentenced as a result of the 
        commission of a felony or crime, an element of which is 
        dishonesty or fraud; has been shown to have or admitted to 
        having engaged in acts or practices tending to show that the 
        person or firm is incompetent; or has engaged in conduct 
        reflecting adversely on the person's or firm's ability or 
        fitness to provide professional services, whether or not a plea 
        was entered or withheld; 
           (5) employed fraud or deception in obtaining a certificate, 
        permit, registration, practice privileges, renewal, or 
        reinstatement or in passing all or a portion of the examination; 
           (6) has had the person's or firm's permit, registration, 
        practice privileges, certificate, right to examine, or other 
        similar authority revoked, suspended, canceled, limited, or not 
        renewed for cause, or has committed unprofessional acts for 
        which the person or firm was otherwise disciplined or 
        sanctioned, including, but not limited to, being ordered to or 
        agreeing to cease and desist from prescribed conduct, in any 
        state or any foreign country; 
           (7) has had the person's or firm's right to practice before 
        any federal, state, or other government agency revoked, 
        suspended, canceled, limited, or not renewed for cause, or has 
        committed unprofessional acts for which the person or firm was 
        otherwise disciplined or sanctioned, including, but not limited 
        to, being ordered to or agreeing to cease and desist from 
        prescribed conduct; 
           (8) failed to meet any requirement for the issuance or 
        renewal of the person's or firm's certificate, registration or 
        permit, or for practice privileges; 
           (9) with respect to temporary suspension orders, has 
        committed an act, engaged in conduct, or committed practices 
        that may result or may have resulted, in the opinion of the 
        board or the complaint committee if authorized by the board, in 
        an immediate threat to the public; or 
           (10) has engaged in any conduct reflecting adversely upon 
        the person's or firm's fitness to perform services while a 
        licensee, individual granted privileges under section 326A.14, 
        or a person registered under section 326A.06, paragraph (b). 
           (b) In lieu of or in addition to any remedy provided in 
        paragraph (a), the board may require, as a condition of 
        continued possession of a certificate, a registration or 
        practice privileges, termination of suspension, reinstatement of 
        permit, registration of a person or firm or of practice 
        privileges under section 326A.14, a certificate, an examination, 
        or release of examination grades, that the person or firm: 
           (1) submit to a peer review of the person's or firm's 
        ability, skills, or quality of work, conducted in a fashion and 
        by persons, entity, or entities as required by the board; and 
           (2) complete to the satisfaction of the board continuing 
        professional education courses specified by the board. 
           (c) Service of the order is effective if the order is 
        served on the person, firm, or counsel of record personally or 
        by certified mail to the most recent address provided to the 
        board for the person, firm, or counsel of record.  The order 
        shall state the reasons for the entry of the order. 
           (d) All hearings required by this subdivision must be 
        conducted in accordance with chapter 14 except with respect to 
        temporary suspension orders as provided for in subdivision 6. 
           (e) In addition to the remedies authorized by this 
        subdivision, the board may enter into an agreement with the 
        person or firm for corrective action and may unilaterally issue 
        a warning to a person or firm. 
           (f) The board shall not use agreements for corrective 
        action or warnings in any situation where the person or firm has 
        been convicted of or pled guilty or nolo contendere to a felony 
        or crime and the felony or crime is the basis of the board's 
        action against the person or firm, where the conduct of the 
        person or firm indicates a pattern of related violations of 
        paragraph (a) or the rules of the board, or where the board 
        concludes that the conduct of the person or firm will not be 
        deterred other than by disciplinary action under this 
        subdivision or subdivision 4 or 6. 
           (g) Agreements for corrective action may be used by the 
        board, or the complaint committee if authorized by the board, 
        where the violation committed by the person or firm does not 
        warrant disciplinary action pursuant to this subdivision or 
        subdivision 4 or 6, but where the board, or the complaint 
        committee if authorized by the board, determines that corrective 
        action is required to prevent further such violations and to 
        otherwise protect the public.  Warnings may be used by the 
        board, or the complaint committee if authorized by the board, 
        where the violation of the person or firm is de minimus, does 
        not warrant disciplinary action under this subdivision or 
        subdivision 4 or 6, and does not require corrective action to 
        protect the public. 
           (h) Agreements for corrective action must not be considered 
        disciplinary action against the person's or firm's application, 
        permit, registration or certificate, or practice privileges 
        under section 326A.14.  However, agreements for corrective 
        action are public data.  Warnings must not be considered 
        disciplinary action against the person's or firm's application, 
        permit, registration, or certificate or person's practice 
        privileges and are private data. 
           Subd. 6.  [PROCEDURE FOR TEMPORARY SUSPENSION OF PERMIT, 
        REGISTRATION, OR CERTIFICATE OR PRACTICE PRIVILEGES.] (a) When 
        the board, or the complaint committee if authorized by the 
        board, issues a temporary suspension order, the suspension is in 
        effect upon service of a written order on the person, firm, or 
        counsel of record, specifying the statute, rule, or order 
        violated.  The order remains in effect until the board issues a 
        final order in the matter after a hearing or upon agreement 
        between the board and the person or firm. 
           (b) The order may prohibit the person or firm from 
        providing professional services in whole or in part, as the 
        facts may require, and may condition the end of such suspension 
        on compliance with a statute, rule, or order that the board has 
        issued or is empowered to enforce. 
           (c) The order must set forth the rights to hearing 
        contained in this section and must state the reasons for the 
        entry of order.  
           (d) Within ten days after service of the order, the person 
        or firm may request a hearing in writing.  The board shall hold 
        a hearing before its own members within five working days of a 
        receipt of a request for hearing or within five working days of 
        receipt of a request for hearing on the sole issue of whether 
        there is a reasonable basis to continue, modify, or lift the 
        temporary suspension.  This hearing is not subject to chapter 
        14.  Evidence presented by the board or the person or firm shall 
        be in affidavit form only.  The person, firm, or counsel of 
        record may appear for oral argument. 
           (e) Within five working days after the hearing, the board 
        shall issue its order and, if the suspension is continued, 
        schedule a contested case hearing within 30 days after issuance 
        of the order.  The administrative law judge shall issue a report 
        within 30 days after closing of the contested case hearing 
        record, notwithstanding the provisions of Minnesota Rules, part 
        1400.8100, subpart 3.  The board shall issue a final order 
        within 30 days after receipt of that report. 
           Subd. 7.  [VIOLATION; PENALTIES; COSTS OF PROCEEDING.] (a) 
        The board may impose a civil penalty not to exceed $2,000 per 
        violation upon a person or firm that violates an order, statute, 
        or rule that the board has issued or is empowered to enforce. 
           (b) The board may, in addition, impose a fee to reimburse 
        the board for all or part of the cost of the proceedings, 
        including reasonable investigative costs, resulting in 
        disciplinary or corrective action authorized by this section, 
        the imposition of civil penalties, or the issuance of a cease 
        and desist order.  The fee may be imposed when the board shows 
        that the position of the person or firm that violates a statute, 
        rule, or order that the board has issued or is empowered to 
        enforce is not substantially justified, unless special 
        circumstances make an award unjust, notwithstanding the 
        provisions of Minnesota Rules, part 1400.8401.  The costs 
        include, but are not limited to, the amount paid by the board 
        for services from the office of administrative hearings, 
        attorney and reasonable investigative fees, court reporters, 
        witnesses, reproduction of records, board members' per diem 
        compensation, board staff time, and expense incurred by board 
        members and staff. 
           (c) All hearings required by this subdivision must be 
        conducted in accordance with chapter 14. 
           Subd. 8.  [PERSONS AND ENTITIES SUBJECT TO DISCIPLINE.] Any 
        person or entity who prepares or reports on financial statements 
        or schedules for a client for a fee is subject to this section 
        and the practice of the person or entity may be disciplined by 
        the boards as provided for in this section.  The board may 
        discipline a person or entity based on violations of this 
        chapter, the board's rules, or misrepresentations made by the 
        person or entity regarding the work the person or entity 
        performed. 
           Subd. 9.  [NOTIFICATION OF OTHER STATES.] In any case where 
        the board renders a decision imposing discipline against a 
        person or firm, the board shall examine its records to determine 
        whether the person or firm holds a certificate or a permit in 
        any other state.  If so, the board shall notify the board of 
        accountancy of the other state of its decision, by mail, within 
        45 days of the decision becoming final.  
           Sec. 11.  [326A.09] [REINSTATEMENT.] 
           The board may reinstate a suspended, revoked, or 
        surrendered certificate, registration, or permit or suspended, 
        revoked, or surrendered practice privileges upon petition of the 
        person or firm holding or formerly holding the registration, 
        permit, or certificate, or practice privileges.  The board may, 
        in its sole discretion, require that the person or firm submit 
        to the board evidence of having obtained up to 120 hours of 
        continuing professional education credits that would have been 
        required had the person or firm held a registration, 
        certificate, permit, or practice privileges continuously.  The 
        board may, in its sole discretion, place any other conditions 
        upon reinstatement of a suspended, revoked, or surrendered 
        certificate, permit, registration, or of practice privileges 
        that it finds appropriate and necessary to ensure that the 
        purposes of this chapter are met.  No suspended certificate, 
        registration, permit, or practice privileges may be reinstated 
        until the former holder, or person with practice privileges has 
        completed one-half of the suspension. 
           Sec. 12.  [326A.10] [UNLAWFUL ACTS.] 
           (a) Only a licensee may issue a report on financial 
        statements of any person, firm, organization, or governmental 
        unit that results from providing attest services, or offer to 
        render or render any attest service.  Only a certified public 
        accountant, a CPA firm, or, to the extent permitted by board 
        rule, a person registered under section 326A.06, paragraph (b), 
        may issue a report on financial statements of any person, firm, 
        organization, or governmental unit that results from providing 
        compilation services or offer to render or render any 
        compilation service.  These restrictions do not prohibit any act 
        of a public official or public employee in the performance of 
        that person's duties or prohibit the performance by any 
        nonlicensee of other services involving the use of accounting 
        skills, including the preparation of tax returns, management 
        advisory services, and the preparation of financial statements 
        without the issuance of reports on them.  Nonlicensees may 
        prepare financial statements and issue nonattest transmittals or 
        information on them which do not purport to be in compliance 
        with the Statements on Standards for Accounting and Review 
        Services (SSARS).  Nonlicensees registered under section 
        326A.06, paragraph (b), may, to the extent permitted by board 
        rule, prepare financial statements and issue nonattest 
        transmittals or information on them. 
           (b) Licensees performing attest or compilation services 
        must provide those services in accordance with professional 
        standards.  To the extent permitted by board rule, registered 
        accounting practitioners performing compilation services must 
        provide those services in accordance with standards specified in 
        board rule. 
           (c) A person who does not hold a valid certificate issued 
        under section 326A.04 shall not use or assume the title 
        "certified public accountant," the abbreviation "CPA," or any 
        other title, designation, words, letters, abbreviation, sign, 
        card, or device tending to indicate that the person is a 
        certified public accountant. 
           (d) A firm shall not provide attest services or assume or 
        use the title "certified public accountants," the abbreviation 
        "CPAs," or any other title, designation, words, letters, 
        abbreviation, sign, card, or device tending to indicate that the 
        firm is a CPA firm unless (1) the firm holds a valid permit 
        issued under section 326A.05, and (2) ownership of the firm is 
        in accordance with this chapter and rules adopted by the board. 
           (e) A person or firm that does not hold a valid certificate 
        or permit issued under section 326A.04 or 326A.05 shall not 
        assume or use the title "certified accountant," "chartered 
        accountant," "enrolled accountant," "licensed accountant," 
        "registered accountant," "accredited accountant," "accounting 
        practitioner," "public accountant," "licensed public 
        accountant," or any other title or designation likely to be 
        confused with the title "certified public accountant," or use 
        any of the abbreviations "CA," "LA," "RA," "AA," "PA," "AP," 
        "LPA," or similar abbreviation likely to be confused with the 
        abbreviation "CPA."  The title "enrolled agent" or "EA" may only 
        be used by individuals so designated by the Internal Revenue 
        Service. 
           (f) Persons registered under section 326A.06, paragraph 
        (b), may use the title "registered accounting practitioner" or 
        the abbreviation "RAP."  A person who does not hold a valid 
        registration under section 326A.06, paragraph (b), shall not 
        assume or use such title or abbreviation. 
           (g) Except to the extent permitted in paragraph (a), 
        nonlicensees may not use language in any statement relating to 
        the financial affairs of a person or entity that is 
        conventionally used by licensees in reports on financial 
        statements.  In this regard, the board shall issue by rule safe 
        harbor language that nonlicensees may use in connection with 
        such financial information.  A person or firm that does not hold 
        a valid certificate or permit, or a registration issued under 
        section 326A.04, 326A.05, or 326A.06, paragraph (b), shall not 
        assume or use any title or designation that includes the word 
        "accountant" or "accounting" in connection with any other 
        language, including the language of a report, that implies that 
        the person or firm holds such a certificate, permit, or 
        registration or has special competence as an accountant.  A 
        person or firm that does not hold a valid certificate or permit 
        issued under section 326A.04 or 326A.05 shall not assume or use 
        any title or designation that includes the word "auditor" in 
        connection with any other language, including the language of a 
        report, that implies that the person or firm holds such a 
        certificate or permit or has special competence as an auditor.  
        However, this paragraph does not prohibit any officer, partner, 
        member, manager, or employee of any firm or organization from 
        affixing that person's own signature to any statement in 
        reference to the financial affairs of such firm or organization 
        with any wording designating the position, title, or office that 
        the person holds, nor prohibit any act of a public official or 
        employee in the performance of the person's duties as such. 
           (h) No person holding a certificate or registration or firm 
        holding a permit under this chapter shall use a professional or 
        firm name or designation that is misleading about the legal form 
        of the firm, or about the persons who are partners, officers, 
        members, managers, or shareholders of the firm, or about any 
        other matter.  However, names of one or more former partners, 
        members, managers, or shareholders may be included in the name 
        of a firm or its successor. 
           (i) Paragraphs (a) to (h) do not apply to a person or firm 
        holding a certification, designation, degree, or license granted 
        in a foreign country entitling the holder to engage in the 
        practice of public accountancy or its equivalent in that 
        country, if: 
           (1) the activities of the person or firm in this state are 
        limited to the provision of professional services to persons or 
        firms who are residents of, governments of, or business entities 
        of the country in which the person holds the entitlement; 
           (2) the person or firm performs no attest or compilation 
        services and issues no reports with respect to the financial 
        statements of any other persons, firms, or governmental units in 
        this state; and 
           (3) the person or firm does not use in this state any title 
        or designation other than the one under which the person 
        practices in the foreign country, followed by a translation of 
        the title or designation into English, if it is in a different 
        language, and by the name of the country. 
           (j) No holder of a certificate issued under section 326A.04 
        may perform attest services through any business form that does 
        not hold a valid permit issued under section 326A.05. 
           (k) No individual licensee may issue a report in standard 
        form upon a compilation of financial information through any 
        form of business that does not hold a valid permit issued under 
        section 326A.05, unless the report discloses the name of the 
        business through which the individual is issuing the report, and 
        the individual: 
           (1) signs the compilation report identifying the individual 
        as a certified public accountant; 
           (2) meets the competency requirement provided in applicable 
        standards; and 
           (3) undergoes no less frequently than once every three 
        years, a peer review conducted in a manner specified by the 
        board in rule, and the review includes verification that the 
        individual has met the competency requirements set out in 
        professional standards for such services. 
           (l) No person registered under section 326A.06, paragraph 
        (b), may issue a report in standard form upon a compilation of 
        financial information unless the board by rule permits the 
        report and the person:  
           (1) signs the compilation report identifying the individual 
        as a registered accounting practitioner; 
           (2) meets the competency requirements in board rule; and 
           (3) undergoes no less frequently than once every three 
        years a peer review conducted in a manner specified by the board 
        in rule, and the review includes verification that the 
        individual has met the competency requirements in board rule. 
           (m) Nothing in this section prohibits a practicing attorney 
        or firm of attorneys from preparing or presenting records or 
        documents customarily prepared by an attorney or firm of 
        attorneys in connection with the attorney's professional work in 
        the practice of law. 
           (n) Notwithstanding other provisions of this section, 
        persons preparing unaudited financial statements under 
        corresponding provisions of prior law shall be permitted to 
        perform compilation services until six months after the board 
        adopts rules under section 326A.06. 
           Sec. 13.  [326A.11] [SINGLE ACT EVIDENCE OF PRACTICE.] 
           In any action brought under section 326A.08, evidence of 
        the commission of a single act prohibited by this chapter is 
        sufficient to justify a penalty, injunction, restraining order, 
        or conviction, respectively, without evidence of a general 
        course of conduct. 
           Sec. 14.  [326A.12] [CONFIDENTIAL COMMUNICATIONS.] 
           (a) Except by permission of the client for whom a licensee 
        performs services or the heirs, successors, or personal 
        representatives of the client, a licensee shall not voluntarily 
        disclose information communicated to the licensee by the client 
        relating to and in connection with services rendered to the 
        client by the licensee.  Nothing in this section may be 
        construed to prohibit: 
           (1) the disclosure of information required to be disclosed 
        by the standards of the public accounting profession in 
        reporting on the examination of financial statements; or 
           (2) disclosures in court proceedings, in investigations or 
        proceedings under section 326A.08, in ethical investigations 
        conducted by private professional organizations, in the course 
        of peer reviews, to other persons active in the organization 
        performing services for that client on a need-to-know basis, or 
        to persons in the entity who need this information for the sole 
        purpose of assuring quality control. 
           (b) This section also applies to persons registered under 
        section 326A.06, paragraph (b). 
           Sec. 15.  [326A.13] [WORKING PAPERS; CLIENTS' RECORDS.] 
           (a) Subject to the provisions of section 326A.12, all 
        statements, records, schedules, working papers, and memoranda 
        made by a licensee or a partner, shareholder, officer, director, 
        member, manager, or employee of a licensee, incident to, or in 
        the course of, rendering services to a client while a licensee, 
        except the reports submitted by the licensee to the client and 
        except for records that are part of the client's records, remain 
        the property of the licensee in the absence of an express 
        agreement between the licensee and the client to the contrary.  
        No statement, record, schedule, working paper, or memorandum may 
        be sold, transferred, or bequeathed, without the consent of the 
        client or the client's personal representative or assignee, to 
        anyone other than one or more surviving partners, stockholders, 
        members or new partners, new stockholders, new members of the 
        licensee, or any combined or merged firm or successor in 
        interest to the licensee.  Nothing in this section may be 
        construed as prohibiting any temporary transfer of workpapers or 
        other material necessary in the course of carrying out peer 
        reviews or as otherwise interfering with the disclosure of 
        information pursuant to section 326A.12. 
           (b) A licensee shall furnish to a client or former client, 
        upon request and reasonable notice: 
           (1) a copy of the licensee's working papers, to the extent 
        that the working papers include records that would ordinarily 
        constitute part of the client's records and are not otherwise 
        available to the client; and 
           (2) any accounting or other records belonging to, or 
        obtained from or on behalf of, the client that the licensee 
        removed from the client's premises or received for the client's 
        account.  The licensee may make and retain copies of such 
        documents of the client when they form the basis for work done 
        by the licensee. 
           (c) Nothing in this section requires a licensee to keep any 
        work paper beyond the period prescribed in any other applicable 
        statute. 
           (d) This section also applies to persons registered under 
        section 326A.06, paragraph (b). 
           Sec. 16.  [326A.14] [SUBSTANTIAL EQUIVALENCY.] 
           Subdivision 1.  [REQUIREMENTS.] (a) An individual whose 
        principal place of business is not in this state and who has a 
        valid certificate or license as a certified public accountant 
        from any state which, upon verification, is in substantial 
        equivalence with the certified public accountant licensure 
        requirements of this chapter shall be presumed to have 
        qualifications substantially equivalent to this state's 
        requirements and shall have all the privileges of certificate 
        holders and licensees of this state without the need to obtain a 
        certificate or permit.  However, such individuals shall notify 
        the board of their intent to enter the state under this 
        provision as provided for in board rule and pay the required fee.
           (b) An individual whose principal place of business is not 
        in this state and who has a valid certificate or license as a 
        certified public accountant from any state whose certified 
        public accountant licensure qualifications, upon verification, 
        are not substantially equivalent with the licensure requirements 
        of this chapter shall be presumed to have qualifications 
        substantially equivalent to this state's requirements and shall 
        have all the privileges of certificate holders and licensees of 
        this state without the need to obtain a certificate or permit if 
        the individual obtains verification, as specified in board rule, 
        that the individual's qualifications are substantially 
        equivalent to the licensure requirements of this chapter.  Such 
        individuals shall notify the board of their intent to enter the 
        state under this provision as provided for in board rule and pay 
        the required fee. 
           (c) Any licensee of another state exercising the privilege 
        afforded under this section consents, as a condition of the 
        grant of this privilege: 
           (1) to the personal and subject matter jurisdiction and 
        disciplinary authority of the board; 
           (2) to comply with this chapter and the board's rules; and 
           (3) to the appointment of the state board that issued the 
        license as the licensee's agent upon whom process may be served 
        in any action or proceeding by this board against the licensee.  
           Subd. 2.  [USE OF TITLE IN ANOTHER STATE.] A licensee of 
        this state offering or rendering services or using the CPA title 
        in another state is subject to the same disciplinary action in 
        this state for which the licensee would be subject to discipline 
        for an act committed in the other state.  The board shall 
        investigate any complaint made by the board of accountancy of 
        another state. 
           Sec. 17.  [TRANSITIONAL PROVISIONS FOR BOARD MEMBERS.] 
           Notwithstanding Minnesota Statutes, section 326A.02, 
        members of the board of accountancy who were appointed to the 
        board prior to January 1, 2003, may complete their terms.  
        Appointments made on or after January 1, 2003, are governed by 
        Minnesota Statutes, section 326A.02. 
           Sec. 18.  [REPEALER.] 
           Minnesota Statutes 2000, sections 326.165; 326.1655; 
        326.17; 326.18; 326.19; 326.192; 326.197; 326.20; 326.201; 
        326.211; 326.212; 326.22; 326.223; 326.224; 326.228; and 
        326.229, are repealed. 
           Sec. 19.  [EFFECTIVE DATE.] 
           This article is effective January 1, 2003. 

                                   ARTICLE 2 
                               CONFORMING CHANGES 
           Section 1.  Minnesota Statutes 2000, section 3.972, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PUBLIC ACCOUNTANT.] For the purposes of 
        this section, "public accountant" means a certified public 
        accountant, or certified public accounting firm, or a licensed 
        public accountant licensed by the board of accountancy 
        under sections 326.17 to 326.229 chapter 326A.  
           Sec. 2.  Minnesota Statutes 2000, section 116J.70, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [LICENSE; EXCEPTIONS.] "Business license" or 
        "license" does not include the following:  
           (1) any occupational license or registration issued by a 
        licensing board listed in section 214.01 or any occupational 
        registration issued by the commissioner of health pursuant to 
        section 214.13; 
           (2) any license issued by a county, home rule charter city, 
        statutory city, township, or other political subdivision; 
           (3) any license required to practice the following 
        occupation regulated by the following sections:  
           (i) abstracters regulated pursuant to chapter 386; 
           (ii) accountants regulated pursuant to chapter 326 326A; 
           (iii) adjusters regulated pursuant to chapter 72B; 
           (iv) architects regulated pursuant to chapter 326; 
           (v) assessors regulated pursuant to chapter 270; 
           (vi) athletic trainers regulated pursuant to chapter 148; 
           (vii) attorneys regulated pursuant to chapter 481; 
           (viii) auctioneers regulated pursuant to chapter 330; 
           (ix) barbers regulated pursuant to chapter 154; 
           (x) beauticians regulated pursuant to chapter 155A; 
           (xi) boiler operators regulated pursuant to chapter 183; 
           (xii) chiropractors regulated pursuant to chapter 148; 
           (xiii) collection agencies regulated pursuant to chapter 
        332; 
           (xiv) cosmetologists regulated pursuant to chapter 155A; 
           (xv) dentists, registered dental assistants, and dental 
        hygienists regulated pursuant to chapter 150A; 
           (xvi) detectives regulated pursuant to chapter 326; 
           (xvii) electricians regulated pursuant to chapter 326; 
           (xviii) mortuary science practitioners regulated pursuant 
        to chapter 149A; 
           (xix) engineers regulated pursuant to chapter 326; 
           (xx) insurance brokers and salespersons regulated pursuant 
        to chapter 60A; 
           (xxi) certified interior designers regulated pursuant to 
        chapter 326; 
           (xxii) midwives regulated pursuant to chapter 147D; 
           (xxiii) nursing home administrators regulated pursuant to 
        chapter 144A; 
           (xxiv) optometrists regulated pursuant to chapter 148; 
           (xxv) osteopathic physicians regulated pursuant to chapter 
        147; 
           (xxvi) pharmacists regulated pursuant to chapter 151; 
           (xxvii) physical therapists regulated pursuant to chapter 
        148; 
           (xxviii) physician assistants regulated pursuant to chapter 
        147A; 
           (xxix) physicians and surgeons regulated pursuant to 
        chapter 147; 
           (xxx) plumbers regulated pursuant to chapter 326; 
           (xxxi) podiatrists regulated pursuant to chapter 153; 
           (xxxii) practical nurses regulated pursuant to chapter 148; 
           (xxxiii) professional fund raisers regulated pursuant to 
        chapter 309; 
           (xxxiv) psychologists regulated pursuant to chapter 148; 
           (xxxv) real estate brokers, salespersons, and others 
        regulated pursuant to chapters 82 and 83; 
           (xxxvi) registered nurses regulated pursuant to chapter 
        148; 
           (xxxvii) securities brokers, dealers, agents, and 
        investment advisers regulated pursuant to chapter 80A; 
           (xxxviii) steamfitters regulated pursuant to chapter 326; 
           (xxxix) teachers and supervisory and support personnel 
        regulated pursuant to chapter 125; 
           (xl) veterinarians regulated pursuant to chapter 156; 
           (xli) water conditioning contractors and installers 
        regulated pursuant to chapter 326; 
           (xlii) water well contractors regulated pursuant to chapter 
        103I; 
           (xliii) water and waste treatment operators regulated 
        pursuant to chapter 115; 
           (xliv) motor carriers regulated pursuant to chapter 221; 
           (xlv) professional firms regulated under chapter 319B; 
           (xlvi) real estate appraisers regulated pursuant to chapter 
        82B; 
           (xlvii) residential building contractors, residential 
        remodelers, residential roofers, manufactured home installers, 
        and specialty contractors regulated pursuant to chapter 326; 
           (4) any driver's license required pursuant to chapter 171; 
           (5) any aircraft license required pursuant to chapter 360; 
           (6) any watercraft license required pursuant to chapter 
        86B; 
           (7) any license, permit, registration, certification, or 
        other approval pertaining to a regulatory or management program 
        related to the protection, conservation, or use of or 
        interference with the resources of land, air, or water, which is 
        required to be obtained from a state agency or instrumentality; 
        and 
           (8) any pollution control rule or standard established by 
        the pollution control agency or any health rule or standard 
        established by the commissioner of health or any licensing rule 
        or standard established by the commissioner of human services. 
           Sec. 3.  Minnesota Statutes 2000, section 214.01, 
        subdivision 3, is amended to read: 
           Subd. 3.  [NON-HEALTH-RELATED LICENSING BOARD.] 
        "Non-health-related licensing board" means the board of teaching 
        established pursuant to section 122A.07, the board of barber 
        examiners established pursuant to section 154.22, the board of 
        assessors established pursuant to section 270.41, the board of 
        architecture, engineering, land surveying, landscape 
        architecture, geoscience, and interior design established 
        pursuant to section 326.04, the board of accountancy established 
        pursuant to section 326.17, the board of electricity established 
        pursuant to section 326.241, the private detective and 
        protective agent licensing board established pursuant to section 
        326.33, the board of accountancy established pursuant to section 
        326A.02, the board of boxing established pursuant to section 
        341.01, and the peace officer standards and training board 
        established pursuant to section 626.841. 
           Sec. 4.  Minnesota Statutes 2000, section 319B.02, 
        subdivision 19, is amended to read: 
           Subd. 19.  [PROFESSIONAL SERVICES.] "Professional services" 
        means services of the type required or permitted to be furnished 
        by a professional under a license, registration, or certificate 
        issued by the state of Minnesota to practice medicine and 
        surgery under sections 147.01 to 147.22, as a physician 
        assistant pursuant to sections 147A.01 to 147A.27, chiropractic 
        under sections 148.01 to 148.105, registered nursing under 
        sections 148.171 to 148.285, optometry under sections 148.52 to 
        148.62, psychology under sections 148.88 to 148.98, dentistry 
        and dental hygiene under sections 150A.01 to 150A.12, pharmacy 
        under sections 151.01 to 151.40, podiatric medicine under 
        sections 153.01 to 153.25, veterinary medicine under sections 
        156.001 to 156.14, architecture, engineering, surveying, 
        landscape architecture, geoscience, and certified interior 
        design under sections 326.02 to 326.15, accountancy 
        under sections 326.17 to 326.229 chapter 326A, or law under 
        sections 481.01 to 481.17, or under a license or certificate 
        issued by another state under similar laws.  Professional 
        services includes services of the type required to be furnished 
        by a professional pursuant to a license or other authority to 
        practice law under the laws of a foreign nation. 
           Sec. 5.  Minnesota Statutes 2000, section 326.53, is 
        amended to read: 
           326.53 [VIOLATIONS; PENALTY PROVISIONS.] 
           Subdivision 1.  [GENERALLY.] (1) Any violation of the 
        provisions of sections 326.02 to 326.229 shall be chapter 326A 
        is a gross misdemeanor. 
           (2) Every person violating any of the provisions of 
        sections 326.523 to 326.526, or assisting in such violation, 
        shall, upon conviction thereof, be punished by a fine not 
        exceeding $3,000 or, in default of the payment of such fine, by 
        imprisonment in the county jail for not more than one year.  In 
        the case of a corporation, the violation of these sections shall 
        be deemed to be also that of the individual directors, officers, 
        or agents of such corporation who have assisted in such 
        violation, or who have authorized, ordered, or done the acts or 
        omissions constituting, in whole or in part, such violation; 
        and, upon conviction thereof, any such directors, officers, or 
        agents shall be punished by fine or imprisonment as herein 
        provided. 
           Sec. 6.  Minnesota Statutes 2000, section 367.36, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [TRANSITION; AUDIT.] In a town in which 
        option D is adopted, the incumbent treasurer shall continue in 
        office until the expiration of the term.  Thereafter the duties 
        of the treasurer prescribed by law shall be performed by the 
        clerk who shall be referred to as the clerk-treasurer.  If the 
        offices of clerk and treasurer are combined and the town's 
        annual revenue is more than $100,000, the town board shall 
        provide for an annual audit of the town's financial affairs by 
        the state auditor or a public accountant in accordance with 
        minimum audit procedures prescribed by the state auditor.  If 
        the offices of clerk and treasurer are combined and the town's 
        annual revenue is $100,000 or less, the town board shall provide 
        for an audit of the town's financial affairs by the state 
        auditor or a public accountant in accordance with minimum audit 
        procedures prescribed by the state auditor at least once every 
        five years, which audit shall be for a one-year period to be 
        determined at random by the person conducting the audit.  Upon 
        completion of an audit by a public accountant, the public 
        accountant shall forward a copy of the audit to the state 
        auditor.  For purposes of this subdivision, "public accountant" 
        means a certified public accountant, or a certified public 
        accounting firm, or a licensed public accountant, all licensed 
        by the board of accountancy under sections 326.17 to 326.229 
        chapter 326A. 
           Sec. 7.  Minnesota Statutes 2000, section 412.222, is 
        amended to read: 
           412.222 [PUBLIC ACCOUNTANTS IN STATUTORY CITIES.] 
           The council of any city may employ public accountants on a 
        monthly or yearly basis for the purpose of auditing, examining, 
        and reporting upon the books and records of account of such 
        city.  For the purpose of this section, "public accountant" 
        means a certified public accountant, or a certified public 
        accounting firm, or a licensed public accountant, all licensed 
        by the board of accountancy under sections 326.17 to 326.23 
        chapter 326A.  All expenditures for these purposes shall be 
        within the statutory limits upon tax levies in such cities.  
           Sec. 8.  Minnesota Statutes 2000, section 471.49, 
        subdivision 10, is amended to read: 
           Subd. 10.  [PUBLIC ACCOUNTANT.] "Public accountant" means a 
        certified public accountant, or a certified public accounting 
        firm, or a licensed public accountant, all licensed by the board 
        of accountancy under sections 326.17 to 326.229 chapter 326A. 
           Sec. 9.  Minnesota Statutes 2000, section 544.42, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For purposes of this section:
           (1) "professional" means a licensed attorney or an 
        architect, certified public accountant, engineer, land surveyor, 
        or landscape architect licensed or certified under sections 
        326.02 to 326.229 chapter 326 or 326A; and 
           (2) "action" includes an original claim, cross-claim, 
        counterclaim, or third-party claim.  An action does not include 
        a claim for damages requiring notice pursuant to section 604.04. 
           Sec. 10.  [EFFECTIVE DATE.] 
           This article is effective January 1, 2003. 
           Presented to the governor May 14, 2001 
           Signed by the governor May 17, 2001, 10:25 a.m.

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