SF 86

2nd Engrossment - 88th Legislature (2013 - 2014) Posted on 05/29/2013 10:08am

A bill for an act
relating to occupations and professions; making changes to the Board of
Accountancy; proposing fee increases; making changes to licensing provisions;
repealing obsolete provisions; amending Minnesota Statutes 2012, sections
326A.04, subdivisions 2, 3, 5, 7; 326A.10; repealing Minnesota Statutes 2012,
section 326A.03, subdivisions 2, 5, 8; Minnesota Rules, parts 1105.0600;
1105.2550; 1105.2700.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2012, section 326A.04, subdivision 2, is amended to read:

Subd. 2.

Timing.

(a) Certificates must be initially issued and renewed deleted text begin for periods of
not more than three years deleted text end new text begin annually new text end but in any event must expire on December 31 in the year
prescribed by the board by rule. 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.

(c) Applications for renewal of a certificate that are complete and timely filed with
the board and are not granted or denied by the board before January 1 are renewed on a
provisional basis as of January 1 and for 90 days thereafter, or until the board grants or
denies the renewal of the certificate, whichever occurs first, provided the licensee meets
the requirements in this chapter and rules adopted by the board.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for licenses issued or renewed after
January 1, 2014.
new text end

Sec. 2.

Minnesota Statutes 2012, section 326A.04, subdivision 3, is amended to read:

Subd. 3.

Residents of other states.

(a) With regard to an applicant who must
obtain a certificate in this state because the applicant does not qualify under the substantial
equivalency standard in section 326A.14, subdivision 1, 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 a certificate in
this state;

(2) the applicant had four years of experience of the type described in section
326A.03, subdivision 6, paragraph (b) deleted text begin , if application is made on or after July 1, 2006,
or section 326A.03, subdivision 8, if application is made before July 1, 2006 deleted text end ; 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;

(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; and

(4) the applicant has met the qualifications prescribed by the board by rule.

(b) 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 or the person meets equivalent requirements as the board prescribes by rule.
Residents of this state who provide professional services in this state at an office location
in this state shall be considered to have their principal place of business in this state.

Sec. 3.

Minnesota Statutes 2012, section 326A.04, subdivision 5, is amended to read:

Subd. 5.

Fee.

new text begin (a) new text end The board shall charge a fee for each application for initial
issuance or renewal of a certificate under this section.

new text begin (b) The board shall annually establish a fee schedule not to exceed the following
amounts:
new text end

new text begin (1) initial issuance of certificate, $150;
new text end

new text begin (2) renewal of certificate with an active status, $100 per year;
new text end

new text begin (3) initial CPA firm permits, except for sole practitioners, $100;
new text end

new text begin (4) renewal of CPA firm permits, except for sole practitioners and those firms
specified in clause (17), $35 per year;
new text end

new text begin (5) initial issuance and renewal of CPA firm permits for sole practitioners, except for
those firms specified in clause (17), $35 per year;
new text end

new text begin (6) annual late processing delinquency fee for permit, certificate, or registration
renewal applications not received prior to expiration date, $50;
new text end

new text begin (7) copies of records, per page, 25 cents;
new text end

new text begin (8) registration of noncertificate holders, nonlicensees, and nonregistrants in
connection with renewal of firm permits, $45 per year;
new text end

new text begin (9) applications for reinstatement, $20;
new text end

new text begin (10) initial registration of a registered accounting practitioner, $50;
new text end

new text begin (11) initial registered accounting practitioner firm permits, $100;
new text end

new text begin (12) renewal of registered accounting practitioner firm permits, except for sole
practitioners, $100 per year;
new text end

new text begin (13) renewal of registered accounting practitioner firm permits for sole practitioners,
$35 per year;
new text end

new text begin (14) CPA examination application, $40;
new text end

new text begin (15) CPA examination, fee determined by third-party examination administrator;
new text end

new text begin (16) renewal of certificates with an inactive status, $25 per year; and
new text end

new text begin (17) renewal of CPA firm permits for firms that have one or more offices located in
another state, $68 per year.
new text end

Sec. 4.

Minnesota Statutes 2012, section 326A.04, subdivision 7, is amended to read:

Subd. 7.

Certificates issued by foreign countries.

The board shall issue a
certificate to a holder of a generally 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
generally 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 generally equivalent to the requirement in section 326A.03,
subdivision 6, paragraph (b), deleted text begin if application is made on or after July 1, 2006, or section
326A.03, subdivision 8, if application is made before July 1, 2006, deleted text end 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
as the board prescribes by rule.

Sec. 5.

Minnesota Statutes 2012, section 326A.10, is amended to read:

326A.10 UNLAWFUL ACTS.

(a) Only a licensee and individuals who have been granted practice privileges
under section 326A.14 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, an individual who
has been granted practice privileges under section 326A.14, 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 and individuals who have been granted practice privileges under
section 326A.14 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
or a practice privilege granted under section 326A.14 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 "CPA's," 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 has complied with 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 or has not otherwise complied with section 326A.04 or
326A.05 as required in this chapter 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), or has not otherwise complied with section 326A.04 or 326A.05 as required in this
chapter 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 or has not otherwise complied with
section 326A.04 or 326A.05 as required in this chapter 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) new text begin (1) new text end 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.

new text begin (2) A common brand name or network name part, including common initials,
used by a CPA firm in its name, is not misleading if the firm is a network firm as
defined in the American Institute of Certified Public Accountants (AICPA) Code of
Professional Conduct in effect July 1, 2011, and when offering or rendering services that
require independence under AICPA standards, the firm complies with the AICPA code's
applicable standards on independence.
new text end

(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) The board shall adopt rules that place limitations on receipt by a licensee or a
person who holds a registration under section 326A.06, paragraph (b), of:

(1) contingent fees for professional services performed; and

(2) commissions or referral fees for recommending or referring to a client any
product or service.

(o) Anything in this section to the contrary notwithstanding, it shall not be a violation
of this section for a firm not holding a valid permit under section 326A.05 and not having
an office in this state to provide its professional services in this state so long as it complies
with the applicable requirements of section 326A.05, subdivision 1.

Sec. 6. new text begin REPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2012, section 326A.03, subdivisions 2, 5, and 8, new text end new text begin are repealed.
new text end

new text begin (b) new text end new text begin Minnesota Rules, parts 1105.0600; 1105.2550; and 1105.2700, new text end new text begin are repealed.
new text end