S2628A-2011 Actions

• Aug 17, 2011: SIGNED CHAP.456
• Aug 5, 2011: DELIVERED TO GOVERNOR
• Jun 20, 2011: returned to senate
• Jun 20, 2011: passed assembly
• Jun 20, 2011: ordered to third reading rules cal.464
• Jun 20, 2011: substituted for a4881b
• Jun 17, 2011: referred to codes
• Jun 17, 2011: RETURNED TO ASSEMBLY
• Jun 17, 2011: REPASSED SENATE
• Jun 14, 2011: AMENDED ON THIRD READING 2628A
• Jun 14, 2011: VOTE RECONSIDERED - RESTORED TO THIRD READING
• Jun 14, 2011: returned to senate
• Jun 14, 2011: RECALLED FROM ASSEMBLY
• Mar 2, 2011: referred to higher education
• Mar 2, 2011: DELIVERED TO ASSEMBLY
• Mar 2, 2011: PASSED SENATE
• Feb 15, 2011: ADVANCED TO THIRD READING
• Feb 14, 2011: 2ND REPORT CAL.
• Feb 8, 2011: 1ST REPORT CAL.73
• Jan 27, 2011: REFERRED TO HIGHER EDUCATION

S2628A-2011 Calendars

S2628A-2011 Votes

S2628A-2011 Memo

BILL NUMBER:S2628A

TITLE OF BILL:
An act
to amend the education law, in relation to the practice of public
accountancy by accountants who are not licensed in New York state; and to
repeal certain provisions of such law relating thereto

PURPOSE:
To enact mobility legislation which will promote uniformity in state
CPA licensing laws in order to allow accountants to provide services
across state lines via travel or electronic communication; to serve
the needs of a wide array of clients; and to ensure a higher uniform
bar for protecting the public interest

SUMMARY OF PROVISIONS:
The term "practice permits" is changed to "practice privilege"
throughout.

Section 1. Section 7406 of the education law, as amended by chapter
651 of the laws of 2008, is amended.

Section 3. Subdivision 2 of section 7408 of the education law, as
amended by chapter 651 of the laws of 2008, is amended.

Section 4. Paragraph a of subdivision 3 of section 7408 of the
education law, as amended by chapter 651 of the laws of 2008, is
amended.

Section 5. Subparagraph 1 of paragraph b of subdivision 3 of section
7408 of the education law, as amended by chapter 651 of the laws of
2008, is amended.

Section 6. Subdivision 3 of section 7408 of the education law is
amended by adding a new paragraph h.

JUSTIFICATION:
Historically, each state has had its own rules, regulations, and
requirements to allow out-of-state CPAs to provide services in that
state resulting in an unworkable patchwork system that was
costly, inefficient, and increasingly untenable. If a CPA has a
license in good standing from a state that utilizes CPA licensure
criteria that are essentially those outlined in the Uniform
Accountancy Act, the CPA would be qualified to practice in a state
other than the CPA's principle place of business. Effective August
2009, with New York State's implementation of the 150 hour
requirement to become a CPA, New York has virtually the same
requirements for becoming a CPA in all but 5 states.

In the Final Report on the Future of the Accounting Profession issued
by the US Office of the Treasury in October 2008, a recommendation
was made calling on states to adopt a uniform system of mobility,
allowing licensed CPAs to provide services across state lines to
provide crucial services in a national and international economy.


For instance, CPAs auditing a company with operations across state
lines are often required to perform audit functions in multiple
states. Experts in particular areas are often brought in to consult
on technical issues. State licensure and/or notification requirements
present huge obstacles to the provision of integrated audit services,
particularly where urgent consultations are required.

CPAs frequently provide tax services to entities and individuals who
are required to file federal returns and state returns in multiple
jurisdictions. Pre-mobility licensing laws often required the CPA to
be licensed in every state where a return is filed or required the
client to hire a separate CPA in each state - an enormous and
unreasonable cost burden for consumers.

These barriers have the harshest impact on small CPA firms and sole
practitioners. Larger firms have developed libraries, databases and
significant staff resources to assist their CPAs in navigating the
maze of state licensing requirements. Small firms are often unable to
match those resources and thus provide effective interstate services.

These barriers are unnecessary and unjustifiable in the context of
modern CPA practice and client needs. The licensing standards for CPAs
are virtually identical in each state and the standards that CPAs
follow in their practice, such as Generally Accepted Accounting
Principles (GAAP) and Generally Accepted Auditing Standards (GAAS) do
not vary from state to state.

This legislation would not change the current law's provisions on New
York CPA licensure. This bill would allow an out-of-state individual,
who has a valid license in good standing in another state where the
education, examination, and experience qualifications are
substantially similar to New York's, to perform accounting,
management advisory, financial advisory, or tax services without
registering himself or herself, or his or her firm.

Mobility would not decrease New York's ability to enforce its laws and
regulations against individuals and firms who are practicing from
outside New York. Mobility would strengthen New York's disciplinary
authority by establishing under Section 7406(2)(d) that a CPA would
consent to jurisdiction simply by entering the state to provide the
audit or other attest or compilation services.

Under mobility, New York consumers would have immediate access to the
services they need from the service provider they desire. That
service provider will be subject to the jurisdiction of New York
regulators.

LEGISLATIVE HISTORY:
2009: S.6307B

FISCAL IMPLICATIONS:
To be determined.

EFFECTIVE DATE:
This act shall take effect 90 days after it shall have become a law.

S2628A-2011 Text

 S T A T E   O F   N E W   Y O R K
 
 2628--A
 2011-2012 Regular Sessions
 I N  SENATE
 January 27, 2011
 
 Introduced  by  Sens.  LAVALLE,  STAVISKY, DeFRANCISCO -- read twice and
 ordered printed, and when printed to be committed to the Committee  on
 Higher Education -- reported favorably from said committee, ordered to
 first  and second report, ordered to a third reading, passed by Senate
 and delivered to the Assembly, recalled, vote  reconsidered,  restored
 to  third  reading, amended and ordered reprinted, retaining its place
 in the order of third reading
 

AN ACT to amend the education law, in relation to the practice of public
 accountancy by accountants who are not licensed in New York state; and
 to repeal certain provisions of such law relating thereto
 THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM
 BLY, DO ENACT AS FOLLOWS:

 

Section  1.  

Section 7406 of the education law, as amended by chapter
 651 of the laws of 2008, is amended to read as follows:

 

S 7406. Limited permits and [temporary] practice [permits]  PRIVILEGE.
 1.  Limited  permits. On recommendation of the board, the department may
 issue a limited permit to an applicant of good moral character,  who  is
 the  holder  of  a  certificate,  license or degree in a foreign country
 constituting a recognized qualification  for  the  performance  in  such
 country  of  the  acts  set forth in section seventy-four hundred one of
 this article, provided the  applicant  has  professional  qualifications
 that  are  determined by the board to be significantly comparable to the
 licensure requirements for certified public accountancy pursuant to this
 article, and the applicant resides or has a place for the regular trans
 action of business within the state, and equal recognition is granted by
 the foreign country concerned to certified public accountants or  public
 accountants  licensed in the United States. Such limited permit shall be
 valid for a period of two years and may be renewed on recommendation  of
 the  board.  Such  permit  shall authorize the applicant to use only the
 title or designation under which he or she is generally known in his  or
 her  own  country,  followed by the name of the country from which he or
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD08393-05-1
 
       S. 2628--A                          2
 she received his or her certificate, license or degree,  notwithstanding
 the  provisions of subdivision two of section seventy-four hundred eight
 of this article.  THE FEE FOR EACH LIMITED PERMIT AND EACH RENEWAL SHALL
 BE ESTABLISHED IN REGULATION BY THE BOARD OF REGENTS.
 2. [Temporary practice permits] PRACTICE PRIVILEGE. a. [On recommenda-
 tion  of  the board] EXCEPT AS OTHERWISE PROVIDED IN SUBPARAGRAPH TWO OR
 THREE OF PARAGRAPH F OF THIS SUBDIVISION, a certified public accountant,
 licensed by another state which the board of regents has  determined  to
 have   [significantly  comparable]  SUBSTANTIALLY  EQUIVALENT  certified
 public accountant licensure requirements, or whose individual  licensure
 qualifications  are  verified  by  the  department  to be [significantly
 comparable] SUBSTANTIALLY EQUIVALENT to New York's requirements, and  in
 good  standing,  who intends to perform ANY OF the services in [subdivi-
 sions] SUBDIVISION one [and],  two  OR  THREE  of  section  seventy-four
 hundred one of this article may [temporarily] practice public accountan
 cy in this state, if the certified public accountant:

 (1)  holds a valid license to practice public accountancy in the other
 state, AND
 (2) practices public accountancy in another state that is his  or  her
 principal place of business[, and
 (3) obtains from the department a temporary practice permit].
 b.  The  [temporary] practice [permit] PRIVILEGE allows such certified
 public accountant, who meets the requirements of  paragraph  a  of  this
 subdivision  to practice public accountancy in this state.  [Each tempo-
 rary practice permit shall allow the holder to practice  in  this  state
 for  an  aggregate  total  of  one hundred eighty days during the twelve
 month period beginning on the effective date of the permit.]
 c. [Applications for the temporary practice permit shall be  submitted
 to  the  department  through  an  electronic  means as prescribed by the
 commissioner. After the department renders  a  timely  initial  determi-
 nation  that  the  applicant  has submitted the information necessary to
 verify that the requirements of paragraph  a  of  this  subdivision  are
 satisfied,  applications  for  temporary practice permits shall be proc-
 essed by the department within thirty days. During such thirty day proc-
 essing period, the applicant may practice; provided,  however,  that  if
 the  application  is  denied  the  applicant shall cease the practice of
 public accountancy in the state of New York.] AN INDIVIDUAL WHO HAS BEEN
 GRANTED PRACTICE PRIVILEGES UNDER THIS SECTION WHO PERFORMS ANY  OF  THE
 SERVICES  IN  SUBDIVISION ONE OR TWO OF SECTION SEVENTY-FOUR HUNDRED ONE
 OF THIS ARTICLE MAY ONLY DO SO THROUGH  A  FIRM  WHICH  HAS  OBTAINED  A
 REGISTRATION  UNDER  SECTION SEVENTY-FOUR HUNDRED EIGHT OF THIS ARTICLE.
 SUCH AN INDIVIDUAL, AS WELL AS AN INDIVIDUAL WITH A NEW YORK LICENSE WHO
 DOES NOT HAVE A PRINCIPAL PLACE OF BUSINESS IN  NEW  YORK,  MAY  PROVIDE
 SERVICES  IN  SUBDIVISION  THREE  OF SECTION SEVENTY-FOUR HUNDRED ONE OF
 THIS ARTICLE THROUGH A FIRM OF CERTIFIED PUBLIC  ACCOUNTANTS  THAT  DOES
 NOT  HAVE  A  REGISTRATION IN THIS STATE BUT THAT HOLDS A VALID LICENSE,
 REGISTRATION, OR PERMIT IN ANOTHER STATE.
 d. Any certified public accountant who practices in this state  pursu
 ant  to  this  section,  and any firm that employs such certified public
 accountant to provide such services in New York, consents to all of  the
 following  as  a  condition of the exercise of such [temporary] practice
 privilege:

 (1) to the personal and subject matter jurisdiction  and  disciplinary
 authority  of  the  board  of regents  AS IF THE PRACTICE PRIVILEGE IS A
 LICENSE, AND AN INDIVIDUAL WITH A PRACTICE PRIVILEGE IS A LICENSEE;
 
       S. 2628--A                          3
 (2) to comply with this article, the rules of the board of regents and
 the regulations of the commissioner; and
 (3) to the appointment of the secretary of state or other public offi
 cial  acceptable to the department, in the certified public accountant's
 state of licensure or the state in which  the  firm  has  its  principal
 place  of  business,  as the certified public accountant or firm's agent
 upon whom process may be served in  any  action  or  proceeding  by  the
 department against such certified public accountant or firm.
 e.  [No  more  than one temporary practice permit may be issued to any
 individual applicant provided that each permit may  be  renewed  by  the
 department  up to three times such that an individual shall practice for
 no more than four years  within  a  five  year  time  period  under  the
 provisions of this section. Such renewals may be granted upon receipt of
 written  notice  from  the  permit  holder,  provided that the applicant
 remains in good standing and in compliance  with  all  applicable  laws,
 rules  and  regulations.] FOR PURPOSES OF THIS SUBDIVISION, THE BOARD OF
 REGENTS  MAY  DETERMINE  THAT  NATIONALLY-RECOGNIZED  CERTIFIED   PUBLIC
 ACCOUNTANT  LICENSURE  REQUIREMENTS  ARE SUBSTANTIALLY EQUIVALENT TO NEW
 YORK'S REQUIREMENTS, SUCH THAT AN INDIVIDUAL LICENSED IN A STATE  DETER
 MINED  TO  HAVE  LICENSURE  REQUIREMENTS SUBSTANTIALLY EQUIVALENT TO THE
 NATIONALLY-RECOGNIZED CPA LICENSURE REQUIREMENTS, OR AN INDIVIDUAL WHOSE
 LICENSURE QUALIFICATIONS ARE DETERMINED TO BE  SUBSTANTIALLY  EQUIVALENT
 TO  THE  NATIONALLY-RECOGNIZED  CPA LICENSURE REQUIREMENTS, MAY PRACTICE
 UNDER THE PRACTICE PRIVILEGE PURSUANT TO THE REQUIREMENTS  CONTAINED  IN
 THIS SUBDIVISION.
 f.  (1)  A  person  who  wishes to practice public accountancy in this
 state but does not meet the requirements of paragraph a of this subdivi
 sion is subject to the full licensing and registration  requirements  of
 this article.
 (2)  In  the  event  the license from the other state of the certified
 public accountant's principal place of business is no longer valid or in
 good standing, or that the certified public accountant has had any final
 disciplinary action taken [against his or her license] by the  licensing
 or  disciplinary authority of any other state concerning the practice of
 public accountancy THAT HAS RESULTED IN (I) THE SUSPENSION OR REVOCATION
 OF HIS OR HER LICENSE, OR (II) OTHER DISCIPLINARY ACTION AGAINST HIS  OR
 HER  LICENSE  THAT  ARISES  FROM  (A)  GROSS NEGLIGENCE, RECKLESSNESS OR
 INTENTIONAL WRONGDOING RELATING TO THE PRACTICE OF  PUBLIC  ACCOUNTANCY,
 (B)  FRAUD  OR  MISAPPROPRIATION  OF  FUNDS  RELATING TO THE PRACTICE OF
 PUBLIC ACCOUNTANCY, OR (C) PREPARATION, PUBLICATION, OR DISSEMINATION OF
 FALSE, FRAUDULENT, OR  MATERIALLY  INCOMPLETE  OR  MISLEADING  FINANCIAL
 STATEMENTS,  REPORTS  OR  INFORMATION RELATING TO THE PRACTICE OF PUBLIC
 ACCOUNTANCY, the certified public accountant  shall  cease  offering  to
 perform  or  performing  such services in this state individually and on
 behalf of his or her  firm,  UNTIL  AND  UNLESS  SUCH  CERTIFIED  PUBLIC
 ACCOUNTANT RECEIVES WRITTEN PERMISSION FROM THE DEPARTMENT TO RESUME THE
 PRACTICE  OF  PUBLIC  ACCOUNTANCY IN THIS STATE PURSUANT TO SUBPARAGRAPH
 THREE OF THIS PARAGRAPH.
 (3) ANY CERTIFIED PUBLIC ACCOUNTANT WHO, WITHIN THE LAST SEVEN  YEARS,
 IMMEDIATELY  PRECEDING THE DATE ON WHICH HE OR SHE WISHES TO PRACTICE IN
 NEW YORK, (I) HAS BEEN THE SUBJECT  OF  ANY  FINAL  DISCIPLINARY  ACTION
 TAKEN  AGAINST  HIM OR HER BY THE LICENSING OR DISCIPLINARY AUTHORITY OF
 ANY OTHER JURISDICTION WITH RESPECT TO ANY PROFESSIONAL LICENSE  OR  HAS
 ANY CHARGES OF PROFESSIONAL MISCONDUCT PENDING AGAINST HIM OR HER IN ANY
 OTHER JURISDICTION, OR (II) HAS HAD HIS OR HER LICENSE IN ANOTHER JURIS
 DICTION  REINSTATED AFTER A SUSPENSION OR REVOCATION OF SAID LICENSE, OR
 
       S. 2628--A                          4
 (III) HAS BEEN DENIED ISSUANCE OR RENEWAL OF A PROFESSIONAL  LICENSE  OR
 CERTIFICATE IN ANY OTHER JURISDICTION FOR ANY REASON OTHER THAN AN INAD
 VERTENT  ADMINISTRATIVE  ERROR, OR (IV) HAS BEEN CONVICTED OF A CRIME OR
 IS  SUBJECT  TO  PENDING  CRIMINAL CHARGES IN ANY JURISDICTION, SHALL SO
 NOTIFY THE DEPARTMENT, ON A FORM PRESCRIBED BY THE DEPARTMENT, AND SHALL
 NOT PRACTICE PUBLIC ACCOUNTANCY IN THIS STATE UNDER PARAGRAPH A OF  THIS
 SUBDIVISION  UNTIL  HE  OR  SHE HAS RECEIVED FROM THE DEPARTMENT WRITTEN
 PERMISSION TO  DO  SO.  IN  DETERMINING  WHETHER  THE  CERTIFIED  PUBLIC
 ACCOUNTANT  SHALL  BE  ALLOWED TO PRACTICE IN THIS STATE, THE DEPARTMENT
 SHALL FOLLOW THE PROCEDURE TO DETERMINE WHETHER AN APPLICANT FOR  LICEN
 SURE  IS  OF  GOOD MORAL CHARACTER. ANYONE FAILING TO PROVIDE THE NOTICE
 REQUIRED BY THIS PARAGRAPH SHALL BE SUBJECT TO THE PERSONAL AND  SUBJECT
 MATTER  JURISDICTION  AND DISCIPLINARY AUTHORITY OF THE BOARD OF REGENTS
 AS IF THE PRACTICE PRIVILEGE IS A LICENSE,  AND  AN  INDIVIDUAL  WITH  A
 PRACTICE  PRIVILEGE IS A LICENSEE, AND MAY BE DEEMED TO BE PRACTICING IN
 VIOLATION OF SECTION SIXTY-FIVE HUNDRED TWELVE OF THIS TITLE.
 g. (1) Notwithstanding subparagraph two of paragraph a of this  subdi
 vision  or  any other inconsistent law or rule to the contrary, a certi
 fied public accountant licensed by another state and  in  good  standing
 who  [obtains  a temporary] OTHERWISE MEETS THE practice [permit] PRIVI
 LEGE REQUIREMENTS under this section and files an application for licen
 sure under section seventy-four hundred four  of  this  article  [on  or
 before  the  expiration  date  of  such  temporary  practice permit] may
 continue to practice under such [permit] PRIVILEGE for a period cotermi
 nous with the period during which his or her application  for  licensure
 remains  pending  with  the  department,  INCLUDING ANY PERIOD AFTER THE
 CERTIFIED PUBLIC ACCOUNTANT ESTABLISHES A PRINCIPAL PLACE OF BUSINESS IN
 NEW YORK WHILE HIS OR HER APPLICATION IS PENDING.
 (2) Nothing in this section shall limit the applicability  of  section
 seventy-four hundred seven of this article.
 [h.  Fees.  The  fee  for  each  limited permit and temporary practice
 permit and each renewal shall be established in regulation by the  board
 of regents.]
 

S 2.

Section 7406-a of the education law is REPEALED.
 

S 3. Subparagraph 1 of paragraph b of subdivision 3 of section 7408 of
 the  education  law,  as  amended by chapter 651 of the laws of 2008, is
 amended to read as follows:

 (1) At least one partner of a partnership or limited  liability  part
 nership,  member  of  a  limited  liability  company or shareholder of a
 professional service corporation or the sole proprietor is  licensed  or
 otherwise  authorized  to  practice  under  this  article and his or her
 license to practice is not currently suspended, annulled or  revoked  in
 any  jurisdiction  and  he  or  she  is regularly engaged in practice on
 behalf of the firm within the state OR, IN THE CASE OF A FIRM THAT HOLDS
 A LICENSE, REGISTRATION,  OR  PERMIT  AS  A  FIRM  OF  CERTIFIED  PUBLIC
 ACCOUNTANTS  IN ANOTHER STATE AND IS REQUIRED TO REGISTER IN THIS STATE,
 AN INDIVIDUAL WITH PRACTICE PRIVILEGES UNDER SUBDIVISION TWO OF  SECTION
 SEVENTY-FOUR HUNDRED SIX OF THIS ARTICLE;
 

S  4. Subdivision 3 of section 7408 of the education law is amended by
 adding a new paragraph h to read as follows:

 H. AN INDIVIDUAL LICENSEE OR INDIVIDUAL PRACTICING  UNDER  SUBDIVISION
 TWO  OF  SECTION  SEVENTY-FOUR  HUNDRED SIX OF THIS ARTICLE WHO SIGNS OR
 AUTHORIZES SOMEONE TO SIGN THE  ACCOUNTANT'S  REPORT  ON  THE  FINANCIAL
 STATEMENTS  ON  BEHALF  OF A FIRM SHALL MEET THE COMPETENCY REQUIREMENTS
 SET OUT IN THE PROFESSIONAL STANDARDS FOR SUCH SERVICES,  AS  RECOGNIZED
 
       S. 2628--A                          5
 IN  SUBDIVISION  ONE OF SECTION SEVENTY-FOUR HUNDRED ONE-A OF THIS ARTI
 CLE, AND AS SET OUT IN THE RULES OF THE BOARD OF REGENTS.
 

S  5.  This  act shall take effect on the ninetieth day after it shall
 have become a law.

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