TITLE 22. EXAMINING BOARDS

PART 22. TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY

CHAPTER 511. ELIGIBILITY

SUBCHAPTER A. GENERAL INFORMATION

22 TAC §511.11

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.11, concerning Definitions.

Background, Justification and Summary

The amendment to §511.11 deletes extraneous language.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a more intelligible rule.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.11.Definitions.

(a) Wherever the term "examination" or "exam" appears in this chapter, reference is made to the Uniform Certified Public Accountant Examination (UCPAE) prepared and graded by the American Institute of Certified Public Accountants (AICPA)[, to include, but not limited to the UCPAE].

(b) An "applicant" means an individual attempting to complete an examination prepared and graded by the AICPA, including, but not limited to, the UCPAE.

(c) The following acronyms, when used in this chapter, shall have the following meanings:

(1) "Act" means the Public Accountancy Act, Chapter 901, Occupations Code;

(2) "NASBA" means the National Association of State Boards of Public Accountancy.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605936

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


SUBCHAPTER B. CERTIFICATION BY EXAMINATION

22 TAC §511.21

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.21, concerning Examination Application.

Background, Justification and Summary

The amendment to §511.21 makes grammatical changes.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a more intelligible rule.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.21.Examination Application.

(a) An application to take the UCPAE shall be made on forms prescribed by the board and shall also be in compliance with board rules and with all applicable laws.

(b) Each applicant shall submit their social security number [numbers] on the application form. Such information shall be considered confidential and can only be disclosed under the provisions of the Act.

(c) An applicant must sign a statement on the application that states that if the applicant's examination is lost, the limit of liability for which the board may be held responsible will be the amount of the exam fee collected by NASBA.

(d) Each applicant for the UCPAE must pay an eligibility fee [to the board] for each section for which the applicant requests to take in accordance with[. The actual fee set by the board is identified in] §521.14 of this title (relating to Eligibility Fee). Application forms not accompanied by the proper fee or required documents shall not be considered complete. The withholding of information, a misrepresentation, or any untrue statement on the application or supplemental documents will be cause for rejection of the application.

(e) Each application must be verified to show that the applicant remains qualified in all respects to take the examination.

(f) The board shall evaluate each examination application and establish dates of eligibility for each approved application, which will be used by the testing vendor or other organization to schedule and test an applicant.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605937

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §511.22

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.22, concerning Initial Filing of the Application of Intent.

Background, Justification and Summary

The amendment to §511.22 makes CPA exam applicants aware that Federal Bureau of Investigation records will be reviewed by the Board as a part of its investigation of the applicant’s good moral character and that an F-1 Visa along with a Certificate of Eligibility for Nonimmigrant Student Status is an acceptable alternative to the required driver’s license and social security card for purposes of identification. The revision also makes grammatical changes for clarity.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be to provide notice to the public of the FBI records check and the alternative form of identification.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.22.Initial Filing of the Application of Intent

(a) The initial filing of the application of intent shall be made on forms prescribed by the board and shall also be in compliance with board rules and with all applicable laws. The application of intent may be submitted at any time and will be used to determine compliance and eligibility for an applicant to take the UCPAE. The application of intent will remain active until:

(1) an applicant takes at least one section of the UCPAE within two years from the date of submission of the application; or

(2) the second anniversary of the submission of the application has lapsed.

(b) Each applicant shall submit their social security number on the application form. Such information shall be considered confidential and can only be disclosed under the provisions of the Act.

(c) Each applicant who submits an application of intent to determine eligibility for the UCPAE must pay a nonrefundable filing fee [set by the board] in accordance with §521.12 of this title (relating to Filing Fee). An application of intent not accompanied by the proper fee or required documents shall not be considered complete. The withholding of information, a misrepresentation, or any untrue statement on the application or supplemental documents will be cause for rejection of the application.

(d) Each applicant must provide official educational documents to be used in determining compliance with the applicable education requirements of the Act.

(e) Each applicant must comply with the board’s procedure to investigate the moral character of applicants in accordance with an established finger print process that accesses the Federal Bureau of Investigation (FBI) database and the Texas Department of Public Safety- Crime Records division files [be informed that a background investigation will be completed to determine the moral character of the applicant].

(f) Each applicant will be notified when all requirements have been met to apply to take the UCPAE, and with the notification, an examination application will be mailed to the applicant.

(g) Each applicant must provide a notarized or certified copy of the following documents:

(1) Unexpired driver's license issued by a state of the United States provided it contains a photograph and information such as name, date of birth, sex, height, eye color, and address; or an unexpired United States passport; and

(2) social security card.

(h) Applicants who are citizens of a foreign country and who cannot meet the requirements of subsection (g) of this section shall comply by providing evidence of a non-expired F-1 Visa issued to students attending a university or college. The board may consider an F-1 Visa with a Certificate of Eligibility for Nonimmigrant Student Status. Form I-20 shall be approved by the designated school official at the educational institution where the applicant is currently attending.

(i) Applicants who cannot meet the requirements of subsection (g) or (h) of this section may be eligible to take the UCPAE [shall comply with the federal Department of Homeland Security] the above ln deleted "shall omply with the federal Department of Homeland Security" by providing evidence of both identity and employment authorization by submitting a notarized or certified copy of one of the following unexpired documents:

(1) An Alien Registration Receipt Card or Permanent Resident Card (Form I-551); or

(2) A foreign passport that contains a temporary I-551 stamp, or temporary I-551 printed notation on a machine-readable immigrant visa; or

(3) An Employment Authorization Document which contains a photograph (Form I-766).

(j) Applicants who do not have or do not submit a social security card will be required to pay an additional fee to NASBA each time they make application for the UCPAE to verify their legal entry into the U.S.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605938

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §511.27

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.27, concerning Good Moral Character Evidence from Foreign Residents.

Background, Justification and Summary

The amendment to §511.27 makes the public aware that an applicant with US citizenship is not required to provide evidence of good moral character from a country where the applicant has studied abroad and an applicant who has visited their official country of residence is not required to provide a certificate of good moral character from country of residence because of the visit.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be to make the public aware of the requirements of evidencing good moral character when studying abroad or when an applicant is officially a resident of another country.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.27.Good Moral Character Evidence from Foreign Residents.

(a) An applicant who at the time of the filing of an application of intent resides outside of the United States or its territories, or has so resided for any portion of the two years immediately preceding the filing shall provide evidence of good moral character satisfactory to the board. Such evidence may include but not be limited to an official "certificate of good moral character," "certificate of good conduct," "police clearance certificate," or other identifying title that shows attestation of good moral character. Certificates presented shall be issued and sealed by an official of the country of residence.

(b) An applicant who is a citizen of the United States and who participates in a study abroad program as a part of their course of study through a U.S. educational institution is not required to provide evidence of good moral character from the country where the study abroad occurred.

(c) An applicant is permitted to visit their official country of residence for a period of time allowable under their official Visa and may not be required to provide a subsequent certificate of good moral character.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605939

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


SUBCHAPTER C. EDUCATIONAL REQUIREMENTS

22 TAC §511.51

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.51, concerning Educational Definitions.

Background, Justification and Summary

The amendment to §511.51 clarifies the definition of "upper division accounting course" to require the standard to be at least the described course work and makes grammatical changes.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be to help the public better understand that the rule's requirement.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.51.Educational Definitions.

(a) The following words and terms extracted from rules promulgated by the Texas Higher Education Coordinating Board, shall have the following meanings, unless the context clearly indicates otherwise.

(1) "Accelerated courses" means courses delivered in shortened semesters which are expected to have the same number of contact hours and the same requirement for out-of-class learning as courses taught in a normal semester.

(2) "Contact hour" means a time unit of instruction used by institutions of higher education consisting of 60 minutes, of which 50 minutes must be direct instruction.

(3) "Distance education" means the formal educational process that occurs when students and instructors are not in the same physical setting for the majority (more than 50 percent) of instruction.

(4) "Distance education course" means a course in which a majority (more than 50 percent) of the instruction occurs when the student(s) and instructor(s) are not in the same place. Two categories of distance education courses are defined:

(A) "Fully distance education course" means a course which may have mandatory face-to-face sessions totaling no more than 15 percent of the instruction time. Examples of face-to-face sessions include orientation, laboratory, exam review, or an in-person test.

(B) "Hybrid/Blended course" means a course in which a majority (more than 50 percent but less than 85 percent), of the planned instruction occurs when the students and the instructor(s) are not in the same place.

(5) "Non-traditionally-delivered course" means a course that is offered in a non-traditional way (for example, over the internet, or through a shortened, intensive format) that does not meet the definition of contact hours.

(6) "Semester" means and normally shall include 15 weeks for instruction and one week for final examination or a total of 16 weeks instruction and examination [examinations] combined.

(7) "Semester credit hour" means a unit of measure of instruction consisting of 60 minutes, of which 50 minutes must be direct instruction, over a 15-week period in a semester system or a 10-week period in a quarter system.

(8) "Traditionally-delivered three semester-credit-hour course" or "traditional course" means a course containing 15 weeks of instruction (45 contact hours) plus a week for final examinations so that such a course contains 45-48 contact hours depending on whether there is a final exam.

(b) The following words and terms shall have the following meanings, unless the context clearly indicates otherwise and shall be considered substantially equivalent to definitions and references in rules promulgated by the Texas Higher Education Coordinating Board.

(1) "AACSB-International" means the Association to Advance Collegiate Schools of Business-International.

(2) "ACBSP" means the Accreditation Council for Business Schools and Programs.

(3) "Accredited community college" means a board-recognized Texas community college or campus of the community college that holds the designation 'Qualifying Educational Credit for the CPA Examination' awarded by the board.

(4) "CHEA" means the Council for Higher Education Accreditation.

(5) "Extension and correspondence school" means a program within an institution that offers courses that are not equivalent to courses offered in an academic department at the institution and the courses are not listed on an official transcript from the institution.

(6) "Institution" or "Institution of Higher Education" means any U.S. public or private senior college or university which confers a baccalaureate or higher degree to its students completing a program of study required for the degree.

(7) "Proprietary organization" means a CPA review course provider.

(8) "Quarter credit hour" is the unit of measurement based upon an institution of higher education system that divides the academic year into three equal sessions of 10 to 11 weeks. A quarter credit hour represents proportionately less work than a semester hour because of the shorter session and is counted as 2/3 of a semester credit hour for each hour of credit.

(9) "Reporting institution" means the institution of higher education in the state that serves as the clearinghouse for educational institutions of higher education in Texas. Currently, the University of Texas-Austin is the reporting institution for the state of Texas.

(10) "SACS" means the Southern Association of Colleges and Schools-Commission on Colleges.

(11) "THECB" means the Texas Higher Education Coordinating Board.

(12) "Transcript" or "Official Transcript" means a document prepared by an institution that contains a record of the academic coursework offered by an academic department that a student has taken, grades and credits earned, and degrees awarded. The document is printed on paper bearing a watermark specific to the institution and is embossed with the institution's seal, date and the signature of the Registrar who is responsible for certifying coursework and degrees.

(13) "UCPAE" means the Uniform Certified Public Accountant Examination prepared and graded by the American Institute of Certified Public Accountants.

(14) "Upper Division Accounting Course" means at a minimum junior and senior year course work that requires the successful completion of introductory or basic course work before it can be taken.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605940

J. Randle (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §511.52

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.52, concerning Recognized Institutions of Higher Education.

Background, Justification and Summary

The amendment to §511.52 allows for the acceptance of extension school coursework form recognized programs.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be to allow course work without a diminution in the quality of the recognized course work.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.52.Recognized Institutions of Higher Education.

(a) The board recognizes institutions of higher education that offer a baccalaureate or higher degree, that either:

(1) are regionally accredited by one of the following organizations:

(A) Middle States Association of Colleges and Schools, Commission on Higher Education (MSCHE);

(B) Northwest Commission on Colleges and Universities (NWCCU);

(C) North Central Association of Colleges and Schools, Higher Learning Commission (NCA-HLC);

(D) New England Association of Schools and Colleges, Commission on Institutions of Higher Education (NEASC-CIHE);

(E) Southern Association of Colleges and Schools, Commission on Colleges (SACS); and

(F) Western Association of Schools and Colleges, Accrediting Commission for Senior Colleges and Universities (WASC-ACSCU);

(2) have a business school or accounting program accredited by AACSB or ACBSP; or

(3) provide evidence of meeting equivalent accreditation requirements of SACS.

(b) The board may receive assistance from the reporting institution in the State of Texas in evaluating an institution of higher education.

(c) The board may accept courses completed through an extension school of a board recognized educational institution provided that the courses are accepted for a business baccalaureate or higher degree conferred by that educational institution.

(d) [(c)] Correspondence [Extension and correspondence] schools [or programs] and continuing education courses do not meet the criteria for recognized institutions of higher education.

(e) [(d)] The requirements related to recognized community colleges are provided in §511.54 of this chapter (relating to Recognized Texas Community Colleges).

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605945

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §511.53

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.53, concerning Evaluation of Foreign Education Documents.

Background, Justification and Summary

The amendment to §511.53 deletes language in subsection (b) and moves it to create new subsection (d).

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be to provide a clearer understanding of acceptable foreign documentation.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.53.Evaluation of Foreign Education Documents.

(a) It is the responsibility of the board to confirm that education obtained at colleges and universities outside of the United States (foreign education) is equivalent to education earned at board-recognized institutions of higher education in the U.S.

(b) The board shall use, at the expense of the applicant, the services of the University of Texas at Austin, Graduate and International Admissions Center, to validate, review, and evaluate foreign education documents submitted by an applicant to determine if the courses taken and degrees earned are substantially equivalent to those offered by the board-recognized institutions of higher education located in the U.S. [Other evaluation or credentialing services of foreign education are not accepted by the board.] Other evaluation or credential services of foreign education are not accepted by the board. The evaluation shall provide the following information to the board:

(1) Degrees earned by the applicant that are substantially equivalent to those conferred by a board-recognized institution of higher education in the U.S. that meets §511.52 of this chapter (relating to Recognized Institutions of Higher Education);

(2) The total number of semester hours or quarter hour equivalents earned that are substantially equivalent to those earned at U.S. institutions of higher education and that meet §511.59 of this chapter (relating to Definition of 150 Semester Hours);

(3) The total number of semester hours or quarter hour equivalents earned in accounting coursework that meets §511.57 of this chapter (relating to Qualified Accounting Courses);

(4) An analysis of the title and content of courses taken that are substantially equivalent to courses listed in §511.57 of this chapter;

(5) The total number of semester hours or quarter hour equivalents earned in accounting that were earned in traditional courses and the total number of semester hours or quarter hour equivalents earned in accounting that were earned in non-traditionally delivered courses, as defined in §511.51 of this chapter (relating to Educational Definitions); and

(6) The total number of semester hours or quarter hour equivalents earned in business coursework that meets §511.58 of this chapter (relating to Definitions of Related Business Subjects and Ethics Courses).

(c) The University of Texas at Austin, Graduate and International Admissions Center, may use the American Association of Collegiate Registrars and Admissions Officers (AACRAO) material, including the Electronic Database for Global Education (EDGE), in evaluating foreign education documents.

(d) Other evaluation or credentialing services of foreign education are not accepted by the board.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605946

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §511.54

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.54, concerning Recognized Texas Community Colleges.

Background, Justification and Summary

The amendment to §511.54 clarifies board standards for academic programs at Texas community colleges.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a better understanding of academic program standards at Texas community colleges.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.54.Recognized Texas Community Colleges.

(a) An applicant who has completed a baccalaureate or higher degree from a board recognized institution of higher education based on the requirements of §511.52 of this chapter (relating to Recognized Institutions of Higher Education), may enter into a course of study at a board recognized Texas community college to complete the educational requirements of §511.57 and §511.58 of this chapter (relating to Qualified Accounting Courses and Definitions of Related Business Subjects and Ethics Courses).

(b) The board recognizes and accepts Texas community colleges that meet board standards for a comprehensive academic program based on the educational requirements of §511.57 and §511.58 of this chapter.

(c) Effective August 1, 2015, the standards include at a minimum all, but are not limited to, the following:

(1) The Texas community college must be accredited by SACS.

(2) Academic accounting and business courses recognized to meet §511.57 and §511.58 of this chapter are deemed by the board as equivalent to upper level coursework at an institution of higher education and must contain a rigorous curriculum that is similar to courses offered in a baccalaureate degree program at a university. Accounting, business, and ethics courses must be developed by a group of full time accounting faculty members and approved by the board prior to offering to students. Modifications to an approved course must be reconsidered by the board prior to offering to students.

(3) Academic courses meeting §511.57 and §511.58 of this chapter must be taken after completing a baccalaureate degree.

(4) The Texas community college must offer:

(A) 30 semester hours of academic accounting courses meeting §511.57 of this chapter, of which not more than one-half of the courses may be taught in a distance learning or hybrid format.

(B) 24 semester hours of academic business courses meeting §511.58 of this chapter, and

(C) A board-approved three semester hour ethics course meeting §511.58(c) of this chapter.

(5) The Texas community college designates an accounting faculty member(s) who is responsible for:

(A) managing the comprehensive academic program at all campuses;

(B) selecting and training qualified faculty members to teach the program courses and regularly evaluating their effectiveness in the classroom;

(C) establishing and maintaining a rigorous program curriculum;

(D) establishing and maintaining a process for advising and guiding students through the program; and

(E) providing annual updates to the board on the status of the academic program.

(6) Faculty members at a community college recognized and accepted by the board must have the following credentials to teach academic courses meeting §511.57 and §511.58 of this chapter:

(A) Doctorate or master's degree in the teaching discipline; or

(B) Master's degree with a concentration in the teaching discipline (a minimum of 18 graduate semester hours in the teaching discipline)

(7) At least three-fourths of the faculty members who are responsible to teach academic courses meeting §511.57 of this chapter must hold a current CPA license.

(8) Faculty members will comply with the established educational definitions in §511.51 of this chapter (relating to Educational Definitions).

(9) The Texas community college will provide ongoing professional development for its faculty as teachers, scholars, and CPA practitioners.

(10) The Texas community college will make available to students a resource library containing current online authoritative literature to support the academic courses meeting §511.57 and §511.58 of this chapter, and will incorporate the online authoritative literate in accounting courses.

(d) A community college recognized and accepted by the board under this provision must be reconsidered by the board on the fifth-year anniversary of the approval. Information brought to the attention of the board by a student or faculty member of the Texas community college that indicates non-compliance with the standards may cause the board to accelerate reconsideration.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605947

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §511.56

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.56, concerning Educational Qualifications under the Act.

Background, Justification and Summary

The amendment to §511.56 makes grammatical changes.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a clearer and better understood rule.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.56.Educational Qualifications under the Act.

(a) An applicant for the UCPAE who met the educational requirements of a prior Act that were in effect at the time of taking the initial examination shall continue to be examined under those requirements unless the applicant chooses to meet the education requirements of the current Act.

(b) An applicant for the UCPAE under the current Act shall meet the following educational requirements at the time of filing the initial application to take the examination and in order to qualify to take [write] the examination:

(1) hold a baccalaureate or graduate degree conferred by an institution of higher education as defined by §511.52 of this chapter (relating to Recognized Institutions of Higher Education) recognized by the board; and

(2) complete no fewer than 150 semester hours or quarter-hour equivalents of courses, as defined by §511.59 of this chapter (relating to Definition of 150 Semester Hours) and consisting of:

(A) no fewer than 30 semester hours or quarter-hour equivalents of upper level accounting courses as defined by §511.57 of this chapter (relating to Qualified Accounting Courses);

(B) no fewer than 24 semester hours or quarter-hour equivalents of upper level related business courses, as defined by §511.58 of this chapter (relating to Definitions of Related Business Subjects and Ethics Courses); and

(C) a 3-semester-hour board-approved ethics course as defined by §511.58 of this chapter.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605948

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §511.57

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.57, concerning Qualified Accounting Courses.

Background, Justification and Summary

The amendment to §511.57 adds a new subsection to recognize accounting courses completed through an extension school.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be applicants who have a better understanding of what constitutes a qualified accounting course when completed through an extension school.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.57.Qualified Accounting Courses.

(a) An applicant shall meet the board's accounting course requirements in one of the following ways:

(1) Hold a baccalaureate or higher degree from a board-recognized institution of higher education as defined by §511.52 of this chapter (relating to Recognized Institutions of Higher Education) and present valid transcript(s) from board-recognized institution(s) that show degree credit for no fewer than 30 semester credit hours of upper division accounting courses as defined in subsection (e) of this section; or

(2) Hold a baccalaureate or higher degree from a board-recognized institution of higher education as defined by §511.52 of this chapter, and after obtaining the degree, complete the requisite 30 semester credit hours of upper division accounting courses, as defined in subsection (e) of this section, from four-year degree granting institutions, or accredited community colleges, provided that all such institutions are recognized by the board as defined by §511.52 of this chapter, and that the accounting programs offered at the community colleges are reviewed and accepted by the board.

(b) Credit for hours taken at board-recognized institutions of higher education using the quarter system shall be counted as 2/3 of a semester credit hour for each hour of credit received under the quarter system.

(c) The board will accept no fewer than 30 semester credit hours of accounting courses from the courses listed in subsection (e)(1) - (13) of this section. The courses must meet the board's standards by containing sufficient business knowledge and application to be useful to candidates taking the UCPAE. A board-recognized institution of higher education must have accepted the courses for purposes of obtaining a baccalaureate degree or its equivalent, and they must be shown on an official transcript. At least 15 of these hours must result from physical attendance at classes meeting regularly on the campus of the transcript-issuing institution.

(d) A non-traditionally-delivered course meeting the requirements of this section must have been reviewed and approved through a formal, institutional faculty review process that evaluates the course and its learning outcomes and determines that the course does, in fact, have equivalent learning outcomes to an equivalent, traditionally delivered course.

(e) The subject-matter content should be derived from the UCPAE Content Specifications Outline and cover some or all of the following:

(1) financial accounting and reporting for business organizations that may include:

(A) up to nine semester credit hours of intermediate accounting;

(B) advanced accounting;

(C) accounting theory;

(2) managerial or cost accounting (excluding introductory level courses);

(3) auditing and attestation services;

(4) internal accounting control and risk assessment;

(5) financial statement analysis;

(6) accounting research and analysis;

(7) up to 12 semester credit hours of taxation (including tax research and analysis);

(8) financial accounting and reporting for governmental and/or other nonprofit entities;

(9) up to 12 semester credit hours of accounting information systems, including management information systems ("MIS"), provided the MIS courses are listed or cross-listed as accounting courses, and the institution of higher education accepts these courses as satisfying the accounting course requirements for graduation with a degree in accounting;

(10) fraud examination;

(11) international accounting and financial reporting; and

(12) an accounting internship program (not to exceed 3 semester credit hours) which meets the following requirements:

(A) the accounting knowledge gained is equal to or greater than the knowledge gained in a traditional accounting classroom setting;

(B) the employing firm provides the faculty coordinator and the student with the objectives to be met during the internship;

(C) the internship plan is approved in advance by the faculty coordinator;

(D) the employing firm provides significant accounting work experience with adequate training and supervision of the work performed by the student;

(E) the employing firm provides an evaluation of the student at the conclusion of the internship, provides a letter describing the duties performed and the supervision to the student, and provides a copy of the documentation to the faculty coordinator and the student;

(F) the student keeps a diary comprising a chronological list of all work experience gained in the internship;

(G) the student writes a paper demonstrating the knowledge gained in the internship;

(H) the student and/or faculty coordinator provides evidence of all items upon request by the board;

(I) the internship course shall not be taken until a minimum of 12 semester credit hours of upper division accounting course work has been completed; and

(J) the internship course shall be the equivalent of a traditional course.

(13) At its discretion, the board may accept up to three semester hours of credit of accounting course work with substantial merit in the context of a career in public accounting, provided the course work is predominantly accounting or auditing in nature but not included in paragraphs (1) - (12) of this subsection. For any course submitted under this provision, the Accounting Faculty Head or Chair must affirm to the board in writing the course's merit and content.

(f) The board requires that a minimum of two semester credit hours in research and analysis relevant to the course content described in subsection (e)(6) or (7) of this section be completed. The semester credit hours may be obtained through a discrete course or offered through an integrated approach. If the course content is offered through integration, the institution of higher education must advise the board of the course(s) that contain the research and analysis content.

(g) The following types of introductory courses do not meet the accounting course definition in subsection (e) of this section:

(1) elementary accounting;

(2) principles of accounting;

(3) financial and managerial accounting;

(4) introductory accounting courses; and

(5) accounting software courses.

(h) Any CPA review course offered by an institution of higher education or a proprietary organization shall not be used to meet the accounting course definition.

(i) CPE courses shall not be used to meet the accounting course definition.

(j) An ethics course required in §511.58(c) of this chapter (relating to Definitions of Related Business Subjects and Ethics Courses) shall not be used to meet the accounting course definition in subsection (e) of this section.

(k) Accounting courses completed through an extension school of a board recognized educational institution may be accepted by the board provided that the courses are accepted for a business baccalaureate or higher degree conferred by that educational institution.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605963

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §511.58

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.58, concerning Definitions of Related Business Subjects and Ethics Courses.

Background, Justification and Summary

The amendment to §511.58 recognizes the acceptance of business courses and extension school business courses when those courses apply toward a business baccalaureate or higher degree.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be to provide the public with a better understanding of courses that may be accepted toward making an applicant eligible to take the CPA exam.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.58.Definitions of Related Business Subjects and Ethics Courses.

(a) Related business courses are those business courses that a board recognized institution of higher education accepts for a business baccalaureate or higher degree.

(b) [(a)] An individual who holds a baccalaureate degree from a recognized educational institution as defined by §511.52 of this chapter (relating to Recognized Institutions of Higher Education) may take related business courses offered at an accredited community college, provided they are recognized as upper level courses for a 4-year baccalaureate degree from an institution recognized by the board.

(c) [(b)] The board will accept no fewer than 24 semester credit hours of upper level courses (for the purposes of this subsection, economics and statistics at any college level will count as upper division courses) as related business subjects (without repeat), taken at a recognized educational institution shown on official transcripts or accepted by a recognized educational institution for purposes of obtaining a baccalaureate degree or its equivalent, in the following areas. No more than 6 credit semester hours taken in any one subject area may be used to meet the minimum hour requirement.

(1) business law, including study of the Uniform Commercial Code;

(2) economics;

(3) management;

(4) marketing;

(5) business communications;

(6) statistics and quantitative methods;

(7) finance;

(8) information systems or technology; and

(9) other areas related to accounting.

(d) [(c)] In addition to the 24 hours required in subsection (b) of this section, the board requires that 3 passing semester hours be earned as a result of taking a course in ethics. The course must be taken at a recognized educational institution and should provide students with a framework of ethical reasoning, professional values and attitudes for exercising professional skepticism and other behavior that is in the best interest of the public and profession. The ethics program should provide a foundation for ethical reasoning and include the core values of integrity, objectivity and independence taught by an instructor who has not been disciplined by the board for a violation of the board's rules of professional conduct unless waived by the board.

(e) [(d)] Effective July 1, 2011, the board requires that a minimum of 2 upper level semester credit hours in accounting communications or business communications be completed. The semester hours may be obtained through a discrete course or offered through an integrated approach. If the course content is offered through integration, the university must advise the board of the course(s) that contain the accounting communications or business communications content.

(f) [(e)] Credit for hours taken at recognized institutions of higher education using the quarter system shall be counted as 2/3 of a semester hour for each hour of credit received under the quarter system.

(g) Related business courses completed through an extension school of a board recognized educational institution may be accepted by the board provided that the courses are accepted for a business baccalaureate or higher degree conferred by that educational institution.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605964

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §511.59

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.59, concerning Definition of 150 Semester Hours.

Background, Justification and Summary

The amendment to §511.59 makes one grammatical change.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a more intelligible rule.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.59.Definition of 150 Semester Hours.

(a) An individual holding a baccalaureate degree shall meet the board's 150 semester hours or quarter hour equivalents of courses for which credit has [have] not been previously earned in one of the following ways:

(1) Complete a master's degree or higher degree conferred by an institution of higher education that is recognized by the board; or

(2) Complete the upper level accounting courses needed to take the UCPAE as defined in §511.57 of this chapter (relating to Qualified Accounting Courses). The hours required for a baccalaureate degree plus the additional hours must equal or exceed 150 semester hours; or

(3) Complete additional semester hours or quarter hour equivalents of upper level courses that enhance professional skills and competence, beyond the accounting hours required for a baccalaureate degree in accounting, from a university that is recognized by the board. The hours required for a baccalaureate degree plus the additional hours must equal or exceed 150 semester hours. The coursework should be in established courses offered through colleges, i.e.: architecture, business administration, communications, engineering, fine arts, liberal arts, science, or another established discipline, within the university.

(b) Any CPA review course offered by an institution of higher education or a proprietary organization shall not be used to meet the board's 150 semester hour requirement.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605965

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


SUBCHAPTER D. CPA EXAMINATION

22 TAC §511.70

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.70, concerning Grounds for Disciplinary Action of Applicants.

Background, Justification and Summary

The amendment to §511.70 relocates language within the rule.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a more intelligible rule.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.70.Grounds for Disciplinary Action of Applicants.

(a) The board may discipline an applicant for any grounds specified in §901.503 Act (relating to Board Action Involving Applicant). Such grounds include but are not limited to the conduct described in subsections (b) - (e) of this section.

(b) The board may discipline an applicant for making a false, fraudulent or materially misleading statement or a material omission on, or in connection with, any application for evaluation, examination or to become a CPA of this state. The withdrawal of any application shall not deprive the board of its authority to take action against an applicant.

(c) The board may discipline an applicant for failing to comply with written guidelines for appropriate conduct by an applicant during the examination or oral guidance by a testing center administrator at any examination location.

(d) The board may discipline an applicant for cheating, subverting, attempting to subvert, aiding, abetting or conspiring to cheat on the UCPAE at any location within the state where the examination is given, or where a Texas applicant is taking the UCPAE at a location outside of the state. The voluntary departure or expulsion from an examination shall not deprive the board of its authority to take action against an applicant.

(e) Cheating, subverting, attempting to subvert, aiding, abetting or conspiring to cheat on the UCPAE includes, but is not limited to, engaging in, soliciting, or procuring any of the following:

(1) any communication between an applicant and anyone other than a proctor or exam administrator while the examination is in progress;

(2) any communication between an applicant and anyone at any time concerning the content of the examination including, but not limited to, any exam question or answer, unless the examination has been publicly released by the preparer of the examination;

(3) taking by another person all or any part of the examination on behalf of an applicant;

(4) possession or use at any time during the examination or while an applicant is in the examination testing center of any device, material, or document that is not expressly authorized for use by examinees during the examination, including, but not limited to, notes, crib sheets, books, and electronic devices; or

(5) using or referring to any device, material, or document that is not expressly authorized for use by an applicant at any time after the commencement of the examination and prior to the conclusion of the examination, to include all breaks during the examination[, to any device, material, or document that is not expressly authorized for use by an applicant], to any device, material, or document that is not expressly authorized for use by an applicant.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605966

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §511.72

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.72, concerning Uniform Examination.

Background, Justification and Summary

The amendment to §511.72 makes grammatical changes.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a more intelligible rule.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.72.Uniform Examination.

(a) The board shall contract with NASBA for the administration of the UCPAE, in conjunction with the AICPA and a test vendor. The examination may be offered at the board's office and at testing facilities within the state that are approved and monitored by the board or its designee. The examination shall be offered during scheduled months as determined by the AICPA, NASBA, and the testing vendor.

(b) The board shall utilize the UCPAE available from the AICPA covering the following sections:

(1) auditing and attestation;

(2) business environment and concepts;

(3) regulation; and

(4) financial accounting and reporting.

(c) An applicant taking the examination is required to have in their possession the Notice to Schedule form provided by NASBA, a government-issued form of identification containing a photograph of the applicant, and a second form of identification such as a board-issued form.

(d) An applicant taking the examination shall [are required to] sign a statement of confidentiality and conduct[,], which the applicant [they] must follow during the entire examination.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605967

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §511.77

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.77, concerning Scoring.

Background, Justification and Summary

The amendment to §511.77 adds language to clarify the meaning of passing score.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a more intelligible rule.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.77.Scoring.

(a) Scoring of the UCPAE shall be performed by the AICPA, subject to the approval of the board. An applicant must earn a minimum [the] passing score established through a psychometrically acceptable standard-setting procedure approved by the board. The minimum [passing] score is 75. The board shall establish a method for accurately tracking and recording an applicant's score. An applicant will be notified of the score no later than the 30th day after the day on which the board receives the applicant's score from NASBA, unless board action is pending; in which case, the applicant is precluded from receiving the UCPAE score until the board action is resolved. In no event will any information concerning the applicant's performance on the UCPAE be released to anyone other than the applicant unless the applicant has delivered written authorization to the board.

(b) An applicant may only request a score review of the UCPAE results from the most recent testing window established by the AICPA and shall pay the fee associated with the score review.

(c) Interpretive comment 1: A score review is generally discouraged because fewer than 1% of all requested score reviews, since the inception of the UCPAE computer-based testing, have resulted in a change to a score.

(d) Interpretive comment 2: The UCPAE results are subject to routine quality controls and are scored twice by the AICPA before scores are released to the board. The score review is a verification that the approved answer key was applied correctly to the UCPAE section and that the written communications questions were scored. The score review is not:

(1) A regrading of the UCPAE section;

(2) An opportunity to find additional points;

(3) An opportunity to review content; or

(4) An opportunity to have an alternate response considered.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605968

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §511.96

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.96, concerning Appeal from Denial of Request.

Background, Justification and Summary

The amendment to §511.96 makes one grammatical change.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a more intelligible rule.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.96.Appeal from Denial of Request.

(a) If an applicant's accommodation request is rejected, denied in whole or in part, or modified by the board for any reason, the applicant shall be notified in writing of the reason(s), postmarked no later than 30 days after the final filing date of the examination for which the applicant has applied. The board shall advise the applicant of the right to appeal, including the procedures to follow.

(b) If the denial is based on the rejection of the professional's opinion supporting the request, the board shall support such rejection with evidence from another professional whom it has consulted in evaluating an applicant's request. The applicant shall be provided with the general opinion of the board's evaluator, including the basis for the opinion.

(c) An applicant's appeal of a decision denying his/her request in whole or in part shall be in the form of a signed or otherwise verified request, including the following:

(1) applicant's name;

(2) date of request; and

(3) facts in support of the appeal.

(d) The appeal shall be accompanied by documentation not previously provided which an applicant wishes the board to consider in its decision. The appeal shall be postmarked no later than 20 days after the applicant receives [received] notification of the denial.

(e) The board reserves the right to request further evidence on the necessity of the accommodation. Based on its judgment, the board may request that an applicant submit to another professional examination to verify the disability and/or to determine what accommodations are most appropriate and effective. In such a case, the board shall assume responsibility for any expenses incurred in obtaining this information.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605969

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §511.97

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.97, concerning Examination of Applicant Approved with Accommodation.

Background, Justification and Summary

The amendment to §511.97 refers the public to the National Association of Boards of Accountancy to find a list of approved accommodations for applicants with a recognized disability and the process for the examination for an applicant with a disability.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will provide the public immediate access to a list of recognized disabilities for the purpose of taking the CPA exam and the process for a person with a disability taking the exam.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.97.Examination of Applicant Approved with Accommodation.

(a) A listing of available accommodations shall be provided to the board by NASBA. [The board may authorize one or more of the following accommodations for an applicant for the CPA examination.]

[(1) Additional testing time--typically time and a half or double time.]

[(2) Separate room--must be monitored throughout test administration.]

[(3) Reader--a board approved individual to read information verbatim from the screen for examinees, separate room required.]

[(4) Amanuensis--a board approved individual to operate mouse and/or keyboard for examinee, separate room required.]

[(5) Sign Language Interpreter--a board approved individual to sign instructions and serve as interpreter between the test center administrator and examinee. Sign language interpreters are normally not allowed to accompany examinees into the testing room.]

[(6) Intelikeys keyboard--allows examinee with limited use of hands to operate the keyboard.]

[(7) Intelikeys keyboard with magic arm and super clamp--swivel arm that allows precise placement of the keyboard.]

[(8) Kensington expert mouse--trackball mouse.]

[(9) Headmaster plus mouse unit--mouse operated by head movements.]

[(10) Selectable background and foreground colors--allows selection of text and background colors for ease of reading on screen.]

[(11) Screen magnifier--attaches to monitor and enlarges the screen.]

[(12) Zoomtext software--screen magnification.]

(b) If the board approves the applicant's request for accommodation, the board will notify the applicant and NASBA [contact the testing center] not less than 30 days prior to the date that the applicant may test. [It is the applicant's responsibility to advise the board of a primary and secondary date for testing.]

(c) Upon arrival at the testing center the applicant may not delete [request other] accommodations or add accommodations [in addition] to those the board has authorized.

(d) There will be no additional fee charged to any candidate for an accommodation approved by the board under this rule.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605972

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


SUBCHAPTER E. VENDOR REQUIREMENTS

22 TAC §511.102

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.102, concerning CPA Examination Availability.

Background, Justification and Summary

The amendment to §511.102 removes the naming of specific months that the exam will be offered because the testing months may change.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be to put the public on notice to inquire as to the testing windows.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.102.CPA Examination Availability.

The examination will be available at test centers on designated days and at designated times during [the] testing windows throughout the year [of January/February, April/May, July/August, and October/November].

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605973

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §511.104

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.104, concerning Test Center Locations.

Background, Justification and Summary

The amendment to §511.104 clarifies that any of the listed circumstances may cause an examination to be discontinued and adds a grammatical change.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a more intelligible rule.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.104.Test Center Locations.

(a) A list of test center locations is available at the board's office and on the board's website.

(b) The board may require that the CPA exam be discontinued at a test center due to:

(1) inadequate staffing;

(2) breach in security; and/or [agreed or]

(3) other conditions that are not in compliance with requirements set out by the Board, AICPA or NASBA.

(c) All test center locations will conform to the standards established by the Americans with Disabilities Act of 1990, as amended.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605975

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


SUBCHAPTER F. EXPERIENCE REQUIREMENTS

22 TAC §511.121

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.121, concerning Application for Approval of Experience.

Background, Justification and Summary

The amendment to §511.121 references the definition of reporting work experience in another section of the rules and replaces "examination requirement" with "UCPAE" in subsection (d).

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a more intelligible rule.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.121.Application for Approval of Experience.

(a) The board, through an applicant's submission of qualifying supervised work experience, shall insure that the applicant applying for the CPA certificate has demonstrated high standards of professional competence, integrity, independence, and learning.

(b) Acceptable work experience defined in §511.123 of this chapter (relating to Reporting Work Experience) shall be gained in at least one of the following areas:

(1) attest services as defined in §501.52(4) of this title (relating to Definitions);

(2) professional accounting services or professional accounting work as defined in §501.52(22) of this title.

(c) The board, on a case-by-case basis, may approve other areas of work experience which are recognized as non-routine accounting work.

(d) An applicant for certification as a CPA shall submit application for approval of work experience. The application shall be made on a form prescribed by the board and submitted after completion of the UCPAE [examination requirement].

(e) Acceptable work experience shall be commensurate with the provision of §901.256 of the Act (relating to Work Experience Requirements).

(f) No advance rulings on the acceptance of work experience will be given.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605976

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §511.122

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.122, concerning Acceptable Work Experience.

Background, Justification and Summary

The amendment to §511.122 updates information in subsections (c)(3)(A) and (c)(3)(B) and makes grammatical changes.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a more intelligible rule.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.122.Acceptable Work Experience.

(a) Work experience shall be under the supervision of a CPA experienced in the non-routine accounting area assigned to the applicant and who holds a current license issued by this board or by another state board of accountancy as defined in §511.124 of this chapter (relating to Acceptable Supervision).

(b) Non-routine accounting involves attest services as defined in §501.52(4) of this title (relating to Definitions), or professional accounting services or professional accounting work as defined in §501.52(22) of this title, and the use of independent judgment, applying entry level or higher professional accounting knowledge and skills to select, correct, organize, interpret, and present real-world data as accounting entries, reports, statements, and analyses extending over a diverse range of tax, accounting, assurance, and control situations.

(c) All work experience, to be acceptable, shall be gained in the following categories or in any combination of these:

(1) Client practice of public accountancy. All work experience gained in a firm in the client practice of public accountancy must be of a non-routine [anon-routine] accounting nature which continually requires independent thought and judgment on important accounting matters. If such firm is a CPA firm it shall be in good standing with the board, or, if the experience is gained in another state or territory, the firm shall be in good standing and in compliance with all laws applicable to CPA firms of that state or territory.

(2) Industry. All work experience gained in industry shall be of a non-routine accounting nature which continually requires independent thought and judgment on important accounting matters. Acceptable industry work experience includes:

(A) internal auditor;

(B) staff, fund or tax accountant;

(C) accounting, financial or accounting systems analyst; and

(D) controller.

(3) Government. All work experience gained in government shall be of a non-routine accounting nature which continually requires independent thought and judgment on important accounting matters and which meets the criteria in subparagraphs (A) - (E) of this paragraph. The board will review on a case-by-case basis experience which does not clearly meet the criteria identified in subparagraphs (A) - (E) of this paragraph. Acceptable government work experience includes but is not limited to:

(A) employment in state government as an accountant or auditor at Salary Classification B14 [B6] or above, or a comparable rating;

(B) employment in federal government as an accountant or auditor at a GS Level 10 [7] or above;

(C) employment as a special agent accountant with the Federal Bureau of Investigation;

(D) military service, as an accountant or auditor as a Second Lieutenant or above; and

(E) employment with other governmental entities as an accountant or auditor.

(4) Law firm. All work experience gained in a law firm shall be of a non-routine accounting nature which continually requires independent thought and judgment on important accounting matters comparable to the experience ordinarily found in a CPA firm, shall be under the supervision of a CPA or an attorney, and shall be in one or more of the following areas:

(A) tax-planning, compliance and litigation; and

(B) estate planning.

(5) Education. Work experience gained as an instructor at a college or university may [will] qualify if evidence is presented showing independent thought and judgment was used on non-routine accounting matters. Only the teaching of upper division courses on a full time basis may be considered. All experience shall be supervised by the department chair or a faculty member who is a CPA.

(6) Internship. The board will consider, on a case-by-case basis, experience acquired through an approved accounting internship program, provided that the experience was non-routine accounting as defined by subsection (b) of this section. If an accounting internship course is counted toward fulfilling the education requirement, the internship may not be used to fulfill the work experience requirement.

(7) Other. Work experience gained in other positions may be approved by the board as experience comparable to that gained in the practice of public accountancy under the supervision of a CPA upon certification by the person or persons supervising the applicant that the experience was of a non-routine accounting nature which continually required independent thought and judgment on important accounting matters.

(8) Self employment may not be used to satisfy the work experience requirement unless approved by the board.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605977

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


SUBCHAPTER H. CERTIFICATION

22 TAC §511.162

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.162, concerning Application for Issuance of the Certificate by Exam After Completion of the CPA Examination.

Background, Justification and Summary

The amendment to §511.162 adds the requirement that applicants must comply with the Board’s finger print process to determine moral character and establishes 85% as a minimum score on the Rules of Professional Conduct exam.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a more intelligible rule.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§511.162.Application for Issuance of the Certificate by Exam After Completion of the CPA Examination.

(a) Application for issuance of the CPA certificate must be made on forms prescribed by the board and shall be in compliance with board rules and with all applicable laws.

(b) The board will send an application for issuance of the CPA certificate to an applicant who successfully completes the UCPAE, and thereafter as requested by the same applicant.

(c) An applicant must submit with the issuance application all information required in §511.161 of this chapter (relating to Qualifications for Issuance of a Certificate).

(d) An applicant must submit with the application for issuance of a certificate the requisite fee in accordance with [set by board in] §521.9 of this title (relating to Certification Fee).

(e) An applicant must comply with the board’s procedure to investigate the moral character of applicants in accordance with an established finger print process that accesses the Federal Bureau of Investigation (FBI) and the Texas Department of Public Safety - Crime records division files.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605978

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


CHAPTER 520. PROVISIONS FOR THE FIFTH-YEAR ACCOUNTING STUDENTS SCHOLARSHIP PROGRAM

22 TAC §520.1

The Texas State Board of Public Accountancy (Board) proposes an amendment to §520.1, concerning Authority and Purpose.

Background, Justification and Summary

The amendment to §520.1 deletes "written examination" and replaces it with "UCPAE" in subsection (b) and makes one grammatical changes.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a more intelligible rule.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§520.1.Authority and Purpose.

(a) Authority for this chapter is provided in Subchapter D, §901.155 of the Act, which is titled Scholarship Trust Fund for Fifth-Year Accounting Students. This chapter establishes procedures to administer the fifth-year accounting students scholarship program.

(b) The purpose of the fifth-year accounting students scholarship program is to provide financial assistance to students intending to take the UCPAE [written examination] conducted for the purpose of obtaining a CPA [granting a] certificate [of CPA] and thus increase the number of highly trained and educated CPAs available to serve the residents of this state.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605950

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §520.2

The Texas State Board of Public Accountancy (Board) proposes an amendment to §520.2, concerning Definitions.

Background, Justification and Summary

The amendment to §520.2 clarifies the definition of half-time student.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a more intelligible rule.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§520.2.Definitions.

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) Cost of attendance--An estimate of the expenses incurred by a typical financial aid student in attending a particular college or university. It includes direct educational costs (tuition, fees, books, and supplies) as well as indirect costs (room and board, transportation, and personal expenses).

(2) Expected family contribution--The amount of discretionary income that should be available to a student from his or her resources and that of his or her family, as determined by the US Department of Education Definition of Expected Family Contribution.

(3) Financial need--The cost of attendance at a particular public or private institution of higher education less the expected family contribution. The cost of attendance and family contribution are to be determined in accordance with board guidelines.

(4) Gift Aid--Educational funds from state, federal, and other sources, such as grants, that do not require repayment from present or future earnings. Assistantships and work-study programs are not considered to be gift aid.

(5) Half-time student--For undergraduates, not in their final semester, who are enrolled or are expected to be enrolled for the equivalent of at least six but not more than nine semester credit hours. For graduate students, not in their final semester, who are enrolled or are expected to be enrolled for the equivalent of 4.5 but not more than six semester credit hours.

(6) Institution--Public and private or independent institutions of higher education as defined in Texas Education Code, §61.003.

(7) Period of enrollment--The term or terms within the current state fiscal year (September 1 - August 31) for which the student was enrolled in an approved institution and met all the eligibility requirements for an award through the program described in this chapter.

(8) Program Officer--The individual named by each participating institution's chief executive officer to serve as agent for the board. The program officer has primary responsibility for all ministerial acts required by the program, including maintenance of all records and preparation and submission of reports reflecting program transactions. Unless otherwise indicated by the administration, the director of student financial aid shall serve as program officer.

(9) Resident of Texas--A resident of the State of Texas as determined in accordance with 19 TAC Part 1, Chapter 21, Subchapter B (relating to Determination of Resident Status). Nonresident students who are eligible to pay resident tuition rates are not residents of Texas.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605951

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §520.3

The Texas State Board of Public Accountancy (Board) proposes an amendment to §520.3, concerning Institutions.

Background, Justification and Summary

The amendment to §520.3 makes two grammatical changes.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a more intelligible rule.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§520.3.Institutions.

(a) Eligibility.

(1) Any college or university defined as a public, private or independent institution of higher education by Texas Education Code, §61.003 that offers the courses required by §511.57 of this title (relating to Qualified Accounting Courses) and §511.58 of this title (relating to Definitions of Related Business Subjects and Ethics Courses), is eligible to participate in the fifth-year accounting students scholarship program.

(2) No institution may, on the grounds of race, color, national origin, gender, religion, age or disability exclude a student [an individual] from participation in, or deny the benefits of the program described in this chapter.

(3) Each participating institution must follow the Civil Rights Act of 1964, Title VI (Public Law 88-353) in avoiding discrimination in admissions.

(b) Approval.

(1) Each approved institution must enter into an agreement with the board, the terms of which shall be prescribed by the executive director.

(2) An institution must be approved by April 1 in order for qualified students enrolled in that institution to be eligible to receive scholarships in the following fiscal year.

(c) Responsibilities.

(1) Probation Notice. If the institution is placed on public probation by its accrediting agency, it must immediately advise scholarship recipients of this condition and maintain evidence in each student's file to demonstrate that the student was so informed.

(2) Disbursements to Students.

(A) The institution must maintain records to prove the disbursement [receipt] of program funds to the student or the crediting of such funds to the student's school account.

(B) If the executive director has reason to believe that an institution has disbursed funds for unauthorized purposes, the institution will be notified and offered an opportunity for a hearing pursuant to the applicable procedures outlined in Chapter 519 of this title (relating to Practice and Procedure) and the rules of procedure of SOAH. Thereafter, if the board determines that funds have been improperly disbursed, the institution shall become responsible for restoring the funds to the board. No further disbursements of scholarship funds shall be permitted to students at that institution until the funds have been repaid.

(d) Reporting.

(1) All institutions must meet board reporting requirements. Such reporting requirements shall include reports specific to allocation and reallocation of scholarship funds as well as progress and year-end reports.

(2) Penalties for Late Reports.

(A) An institution that postmarks or electronically submits a progress report a week (seven (7) calendar days) or more after its due date will be ineligible to receive additional funding through the reallocation occurring at that time.

(B) The executive director may penalize an institution by reducing its allocation of funds in the following year by up to 10 percent for each progress report that is postmarked or submitted electronically more than a week (seven (7) calendar days) late.

(C) The executive director may assess more severe penalties against an institution if any report is received by the board more than one month (thirty (30) calendar days) after its due date. The maximum penalty for a single year is 30 percent of the school's allocation. If penalties are invoked two consecutive years, the institution may be penalized an additional 20 percent.

(3) If the executive director determines that a penalty is appropriate, the institution will be notified by certified mail, addressed to the program officer. Within 21 days from the date that the program officer receives the written notice, the institution must submit a written response appealing the board's decision, or the penalty shall become final and no longer subject to an appeal. An appeal under this section will be conducted in accordance with the rules provided in the applicable sections of Chapter 519 of this title and the procedural rules of SOAH.

(e) Program Reviews. If selected for such by the board, participating institutions must submit to program reviews of activities related to the fifth-year accounting students scholarship program.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605952

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §520.4

The Texas State Board of Public Accountancy (Board) proposes an amendment to §520.4, concerning Eligible Students.

Background, Justification and Summary

The amendment to §520.4 clarifies that in order for a student to be eligible for a scholarship in this program the student must be enrolled in the student’s final semester, the application of intent to take the exam has not been approved and that the board may seek reimbursement for the grant through legal means should the student fail to take the exam.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be to reinforce the eligibility requirements and the student’s obligations to take the CPA exam upon accepting the scholarship.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§520.4.Eligible Students.

(a) To receive funds, a student must:

(1) be enrolled on at least a half-time basis or in the final semester of the degree at an approved institution in Texas;

(2) maintain satisfactory academic progress in the program of study as defined by the institution;

(3) have completed at least 120 credit hours of college work, including at least 15 hours of accounting;

(4) sign a written statement confirming the intent to take the examination conducted by or pursuant to the authority of the board for the purpose of obtaining [granting] a certificate of "certified public accountant" in Texas;

(5) agree to pay on demand all scholarship funds received if the student [he] does not sit for at least one part of the exam within three years of submitting the application of intent, unless the executive director grants an extension of the three-year requirement upon a showing of good cause;

(6) agree that failure to comply with paragraph (5) of this subsection may cause the board to take measures necessary to enforce the repayment of the scholarship including bringing a civil suit in state district court;

(7) [(6)] confirm that the Application of Intent has not been approved or that the applicant has [he or she has] not been approved to take [yet taken] the CPA examination in Texas or another jurisdiction;

(8) [(7)] maintain a cumulative grade point average, as determined by the institution, that is equal to or greater than the grade point average required by the institution for graduation;

(9) [(8)] be a resident of Texas; and

(10) [(9)] have a statement on file with the institution of higher education indicating the student is registered with the Selective Service System as required by federal law or is exempt from Selective Service registration under federal law.

(b) In selecting recipients the Program Officer shall consider at a minimum the following factors relating to each applicant:

(1) the applicant's financial need, which may be based on but not limited to the cost of the applicant attending school less family contribution and any gift aid (an award may not exceed the applicant's need nor be less than the amount calculated in accordance with the formula provided institutions in the application instructions);

(2) scholastic ability and performance as measured by the student's cumulative college grade point average as determined by the institution in which the student is enrolled; and

(3) ethnic or racial minority status.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605954

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §520.5

The Texas State Board of Public Accountancy (Board) proposes an amendment to §520.5, concerning Award Amounts and Uses.

Background, Justification and Summary

The amendment to §520.5 makes one grammatical change.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a more intelligible rule.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§520.5.Award Amounts and Uses.

(a) Funds awarded through this program may include any gifts, grants and donations of real or personal property from any entity, subject to limitations or conditions set by law, for the purposes of this chapter.

(b) Award Amount and Disbursements.

(1) The minimum and maximum annual award for a student through this program shall be an amount recommended by the advisory committee and announced to institutions in the allocation announcement sent out for the relevant year, less any amount previously received through this program.

(2) No student [individual] shall receive an aggregate total of more than the amount recommended by the advisory committee and announced to institutions in the allocation announcement through the program.

(3) An individual student's scholarship shall be paid out in the form of at least one disbursement per semester.

(c) No scholarship disbursed to a student shall be used for any purpose other than for meeting the cost of attending an approved institution.

(d) At the time an award is made to a student, it shall not exceed the student's need. No future adjustment is required if subsequent awards during the student's period of enrollment cause an over award of $300 or less.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605956

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §520.6

The Texas State Board of Public Accountancy (Board) proposes an amendment to §520.6, concerning Allocations and Reallocations.

Background, Justification and Summary

The amendment to §520.6 clarifies that funds not completely utilized by one school can be reallocated to other schools during the same school year.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a better understanding of how funds can be allocated.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§520.6.Allocations and Reallocations.

(a) The board, with the assistance of the advisory committee, shall develop a formula for allocating funds to participating institutions in a way that fulfills the purpose of the program.

(b) Unless otherwise indicated, institutions shall have until a date specified by the board via a policy memo addressed to the program officer at the institution to encumber all funds allocated to them. On that date, institutions lose claim to any unencumbered funds and the unencumbered funds are available to the board for reallocation to other institutions. If necessary for ensuring the full use of funds, the funds not utilized may be reallocated to other institutions within the same fiscal year [subsequent reallocations may be scheduled until all funds are awarded and disbursed].

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605957

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


22 TAC §520.9

The Texas State Board of Public Accountancy (Board) proposes an amendment to §520.9, concerning Advisory Committee.

Background, Justification and Summary

The amendment to §520.9 adds language to subsection (a)(1)(F) to include "successor organizations" in order to be inclusive of an organization that changes its name.

Fiscal Note

William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.

Public Benefit Cost Note

Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a more intelligible rule.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on January 2, 2017.

The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.

No other article, statute or code is affected by this proposed amendment.

§520.9.Advisory Committee.

(a) The board shall appoint an advisory committee to advise the board concerning assistance provided under this chapter to fifth-year accounting students.

(1) The advisory committee shall consist of:

(A) a presiding officer named by the board;

(B) one representative named by the board;

(C) one representative named by the TSCPA;

(D) a Texas representative of the American Accounting Association named by that organization;

(E) one representative named by the National Association of Black Accountants;

(F) one representative named by the American Association of Hispanic Certified Public Accountants or its successor organizations; and

(G) two representatives named by the Texas Higher Education Coordinating Board who are the chairs of accounting departments at Texas colleges and universities, one of whom shall be a representative of a private college or university and the other shall be a representative from a college or university that primarily serves minority students.

(2) The costs of participation on an advisory committee of a member representing a particular organization or agency shall be borne by that member or the organization or agency the member represents.

(b) The duties of the advisory committee shall be to advise the board on:

(1) how the scholarships provided for under this chapter should be established and administered to best promote the public purpose of the scholarships;

(2) the amount of money needed to adequately fund the scholarship program; and

(3) setting priorities among the factors identified by §520.4 of this chapter (relating to Eligible Students).

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605958

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 305-7842


PART 23. TEXAS REAL ESTATE COMMISSION

CHAPTER 535. GENERAL PROVISIONS

SUBCHAPTER B. GENERAL PROVISIONS RELATING TO THE REQUIREMENTS OF LICENSURE

22 TAC §535.4

The Texas Real Estate Commission (TREC) proposes amendments to 22 TAC §535.4, License Required, in Chapter 535, General Provisions.

The amendments are proposed to clarify the definition of what constitutes showing property in light of the statutory requirement that license holders must pass criminal background reviews prior to licensure. The amendments also set out the circumstances under which a license holder can provide an unescorted person access to a vacant rental property. The rule was also updated to replace the term "salesperson" with the new statutory term of "sales agent."

Kerri Lewis, General Counsel, has determined that for the first five-year period the proposed amendments are in effect there will be no fiscal implications for the state or for units of local government as a result of enforcing or administering the sections. There is no significant anticipated impact on small businesses, micro-businesses or local or state employment as a result of implementing the sections. There is no anticipated significant economic cost to persons who are required to comply with the proposed amendments.

Ms. Lewis also has determined that for each year of the first five years the sections as proposed are in effect, the public benefit anticipated as a result of enforcing the sections will be better clarity in the rule and greater consumer protection.

Comments on the proposal may be submitted to Kerri Lewis, General Counsel, Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188 or via email to general.counsel@trec.texas.gov. The deadline for comments is 30 days after publication in the Texas Register.

The amendments are proposed under Texas Occupations Code, §1101.151, which authorizes the Texas Real Estate Commission to adopt and enforce rules necessary to administer Chapters 1101 and 1102; and to establish standards of conduct and ethics for its license holders to fulfill the purposes of Chapters 1101 and 1102 and ensure compliance with Chapters 1101 and 1102.

The statutes affected by this proposal are Texas Occupations Code, Chapter 1101. No other statute, code or article is affected by the proposed amendments.

§535.4.License Required.

(a) The Act applies to any person acting as a real estate broker or sales agent [salesperson] while physically within Texas, regardless of the location of the real estate involved or the residence of the person's customers or clients. For the purposes of the Act, a person conducting brokerage business from another state by mail, telephone, the Internet, email, or other medium is acting within Texas if the real property concerned is located wholly or partly in Texas.

(b) This section does not prohibit cooperative arrangements between non-resident brokers and Texas brokers pursuant to §1101.651(a)(2) of the Act and §535.131 of this title.

(c) Unless otherwise exempted by the Act, a person must be licensed as a broker or sales agent [salesperson] to show a property [broker's listings]. For purposes of this section, "show" a property includes causing or permitting the property to be viewed by a prospective buyer or tenant, unlocking or providing access onto or into a property for a prospective buyer or tenant, and hosting an open house at the property.

(d) A license holder may permit a prospective tenant unescorted access to view a property available for rent or lease only if:

(1) the property is vacant, meaning no person lives at, and no personal property except property intended to remain or convey is stored at, the property;

(2) the license holder employs a method to control access and verify the identity of the prospective tenant; and

(3) the property owner has signed a written consent that sets out in bold print in at least 12-point font that:

(A) the property owner is aware that unescorted access may occur; and

(B) specifies whether the broker enabling unescorted access or the property owner will be responsible for any damage that results from such unescorted access.

(e) [(d)] The employees, agents or, associates of a licensed broker must be licensed as brokers or sales agents [salespersons] if they direct or supervise other persons who perform acts for which a license is required.

(f) [(e)] A real estate license is required for a person to solicit listings or to negotiate in Texas for listings.

(g) [(f)] A business entity owned by a broker or sales agent [salesperson] which receives compensation on behalf of the license holder must be licensed as a broker under the Act.

(h) [(g)] A person controls the acceptance or deposit of rent from a resident of a single-family residential real property unit and must be licensed under the Act if the person has the authority to:

(1) use the rent to pay for services related to management of the property;

(2) determine where to deposit the rent; or

(3) sign checks or withdraw money from a trust account.

(i) [(h)] For purposes of subsection (i) [(g)] of this section, a single-family residential unit includes a single family home or a unit in a condominium, co-operative, row-home or townhome. The term does not include a duplex, triplex or four-plex unless the units are owned as a condominium, cooperative, row-home, or townhome.

(j) [(i)] A person must be licensed as a broker to operate a rental agency.

(k) [(j)] A real estate license is required of a subsidiary corporation, which, for compensation, negotiates in Texas for the sale, purchase, rent, or lease of its parent corporation's real property.

(l) [(k)] A person who arranges for a tenant to occupy a residential property must have a real estate license if the person:

(1) does not own the property or lease the property from its owner;

(2) receives valuable consideration; and

(3) is not exempt under the Act.

(m) [(l)] A real estate license is required for a person to receive a fee or other consideration for assisting another person to locate real property for sale, purchase, rent, or lease, including the operation of a service which finds apartments or homes.

(n) [(m)] The compilation and distribution of information relating to rental vacancies or property for sale, purchase, rent, or lease is activity for which a real estate license is required if payment of any fee or other consideration received by the person who compiles and distributes the information is contingent upon the sale, purchase, rental, or lease of the property. An advance fee is a contingent fee if the fee must be returned if the property is not sold, purchased, rented, or leased.

(o) [(n)] A person must be licensed as a broker or sales agent [salesperson] if, for compensation, the person:

(1) advertises for others regarding the sale, purchase, rent, or lease of real property;

(2) accepts inquiries received in response to such advertisements; and

(3) refers the inquiry to the owner of the property.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 17, 2016.

TRD-201605881

Kerri Lewis

General Counsel

Texas Real Estate Commission

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 936-3092


SUBCHAPTER F. REQUIREMENTS FOR EDUCATION PROVIDERS, COURSES AND INSTRUCTORS FOR QUALIFYING EDUCATION

22 TAC §535.61

The Texas Real Estate Commission (TREC) proposes amendments to 22 TAC §535.61, Approval of Providers of Qualifying Courses, in Chapter 535, General Provisions.

The proposed amendments to §535.61 ensure greater consumer protection by requiring out-of-state providers to substantially meet the same standards required for in-state providers before they can offer a course for credit to Texas consumers.

Kerri Lewis, General Counsel, has determined that for the first five-year period the proposed amendments are in effect there will be no fiscal implications for the state or for units of local government as a result of enforcing or administering the sections. There is no significant anticipated impact on small businesses, micro-businesses or local or state employment as a result of implementing the sections. There is no anticipated significant economic cost to persons who are required to comply with the proposed amendments.

Ms. Lewis also has determined that for each year of the first five years the sections as proposed are in effect, the public benefit anticipated as a result of enforcing the sections will be consistent requirements that are easier for consumers and license holders to read and understand.

Comments on the proposal may be submitted to Kerri Lewis, General Counsel, Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188 or via email to general.counsel@trec.texas.gov. The deadline for comments is 30 days after publication in the Texas Register.

The amendments are proposed under Texas Occupations Code, §1101.151, which authorizes the Texas Real Estate Commission to adopt and enforce rules necessary to administer Chapters 1101 and 1102; and to establish standards of conduct and ethics for its license holders to fulfill the purposes of Chapters 1101 and 1102 and ensure compliance with Chapters 1101 and 1102.

The statutes affected by this proposal are Texas Occupations Code, Chapter 1101. No other statute, code or article is affected by the proposed amendments.

§535.61.Approval of Providers of Qualifying Courses.

(a) (No change.)

(b) Exempt Providers.

(1) The following persons may submit real estate qualifying courses for approval for credit under §535.62(i) of this subchapter without becoming an approved provider of qualifying courses:

(A) a person approved by a real estate regulatory agency to offer qualifying real estate courses in another state that has approval requirements for providers that are substantially equivalent to the requirements for approval in this state;

(B) an accredited college or university in accordance with §535.66 of this subchapter;

(C) a post-secondary educational institution established in and offering qualifying real estate courses in another state;

(D) a United States armed forces institute; and

(E) a nationally recognized professional designation institute or council in the real estate industry.

(2) The following persons may submit real estate inspector qualifying courses for approval for credit under §535.62(i) of this subchapter without becoming an approved provider of qualifying courses:

(A) a provider approved by an inspector regulatory agency of another state that has approval requirements for providers that are substantially equivalent to the requirements for approval in this state;

(B) an accredited college or university in accordance with §535.66 of this subchapter;

(C) a United States armed forces institute;

(D) a unit of federal, state or local government;

(E) a nationally recognized building, electrical, plumbing, mechanical or fire code organization;

(F) a professional trade association in the inspection field or in a related technical field; or

(G) an entity whose courses are approved and regulated by an agency of this state.

(c) - (k) (No change.)

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605941

Kerri Lewis

General Counsel

Texas Real Estate Commission

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 936-3092


22 TAC §535.64

The Texas Real Estate Commission (TREC) proposes amendments to 22 TAC §535.64, Content Requirements for Qualifying Real Estate Courses, in Chapter 535, General Provisions.

The proposed amendments to §535.64 set out the topics and times required for the content for the Real Estate Math Qualifying Course, with the guideline form for course approval containing specific units being proposed by reference in the rule.

Kerri Lewis, General Counsel, has determined that for the first five-year period the proposed amendments are in effect there will be no fiscal implications for the state or for units of local government as a result of enforcing or administering the sections. There is no significant anticipated impact on small businesses, micro-businesses or local or state employment as a result of implementing the sections. There is no anticipated significant economic cost to persons who are required to comply with the proposed amendments.

Ms. Lewis also has determined that for each year of the first five years the sections as proposed are in effect, the public benefit anticipated as a result of enforcing the sections will be consistent requirements that are easier for consumers and license holders to read and understand.

Comments on the proposal may be submitted to Kerri Lewis, General Counsel, Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188 or via email to general.counsel@trec.texas.gov. The deadline for comments is 30 days after publication in the Texas Register.

The amendments are proposed under Texas Occupations Code, §1101.151, which authorizes the Texas Real Estate Commission to adopt and enforce rules necessary to administer Chapters 1101 and 1102; and to establish standards of conduct and ethics for its license holders to fulfill the purposes of Chapters 1101 and 1102 and ensure compliance with Chapters 1101 and 1102.

The statutes affected by this proposal are Texas Occupations Code, Chapter 1101. No other statute, code or article is affected by the proposed amendments.

§535.64.Content Requirements for Qualifying Real Estate Courses.

(a) (No change.)

(b) Elective qualifying courses. To be approved by the Commission, the following elective qualifying courses must contain the content outlined below:

(1) Property Management, which shall contain the following topics, the units of which are outlined in the PROPM-0, Qualifying Real Estate Course Approval Form, Property Management, hereby adopted by reference:

(A) Professional Property Management - 120 minutes;

(B) Feasibility of Property Management - 90 minutes

(C) Marketing Plan - 60 minutes;

(D) Management Operations - 130 minutes;

(E) Owner Relations - 120 minutes;

(F) Market Analysis and Management of Housing - 95 minutes;

(G) Leases - 100 minutes;

(H) Tenant Relations - 115 minutes;

(I) Federal, State and Local Laws - 230 minutes;

(J) Maintenance and Construction - 90 minutes;

(K) Commercial Property Management - 150 minutes;

(L) Risk and Environmental Issues - 110 minutes; and

(M) Safety and Security Issues for Property Managers and Staff - 90 minutes;

(2) Real Estate Marketing, which shall contain the following topics, the units of which are outlined in the REM-0, Qualifying Real Estate Course Approval Form, Real Estate Marketing, hereby adopted by reference:

(A) Real Estate Marketing - 80 minutes;

(B) The Marketing Concept - 80 minutes

(C) Marketing Research and Data Analysis - 150 minutes;

(D) Prospecting and Target Marketing - 80 minutes;

(E) Technology and Online Marketing - 100 minutes;

(F) Social Media Marketing - 120 minutes;

(G) Product and Pricing Strategies -180 minutes;

(H) Compensation Models - 60 minutes;

(I) Characteristics of a Successful Sales Agent - 150 minutes;

(J) Understanding Clients - 90 minutes;

(K) Negotiating and Selling Skills - 120 minutes;

(L) Steps to Executing Agreements - 50 minutes; and

(M) State and Federal Laws - 90 minutes;

(N) Ethics and Real Estate Professionalism - 150 minutes;

(3) Real Estate Math, which shall contain the following topics, the units of which are outlined in the REMath-0, Qualifying Real Estate Course Approval Form, Real Estate Math, hereby adopted by reference:

(A) Introduction to Real Estate Math - 150 minutes;

(B) Review of Mathematical Logic Formulas - 150 minutes;

(C) List Price, Sales Price and Net Price - 50 minutes;

(D) Property Mathematics - 120 minutes;

(E) Appreciation & Depreciation - 60 minutes;

(F) Real Estate Taxes - 100 minutes;

(G) Mathematics of Real Estate Finance - 400 minutes;

(H) Appraisal Methods - 100 minutes;

(I) Closing Statements - 180 minutes;

(J) Investment Analysis - 90 minutes;

(K) Commercial Lease Calculations - 100 minutes;

(4) [(3)] other than Property Management, [and] Real Estate Marketing, and Real Estate Math meet the requirements of §1101.003 of the Act; or

(5) [(4)] Residential Inspection for Real Estate Agents (or equivalent), which shall include but is not limited to:

(A) repair-related contract forms and addenda;

(B) inspector and client agreements;

(C) inspection standards of practice and standard inspection report form;

(D) tools and procedures;

(E) electromechanical systems (plumbing, heating, air conditioning, appliances, energy-saving considerations); and

(F) structures (lot and landscape, roofs, chimney, gutters, paved areas, walls, windows and doors, insect damage and storage areas).

(c) - (d) (No change.)

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605942

Kerri Lewis

General Counsel

Texas Real Estate Commission

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 936-3092


SUBCHAPTER R. REAL ESTATE INSPECTORS

22 TAC §535.216

The Texas Real Estate Commission (TREC) proposes amendments to 22 TAC §535.216, Renewal of License in Subchapter R, Real Estate Inspectors. The proposed amendments to §535.216 clarify the process for renewing an expired inspector license when the license has been expired for less than six months.

Kristen Worman, Deputy General Counsel, has determined that for the first five-year period the proposed amendments are in effect there will be no fiscal implications for the state or for units of local government as a result of enforcing or administering the sections. There is no anticipated impact on small businesses, micro-businesses or local or state employment as a result of implementing the sections. There is no anticipated significant economic cost to persons who are required to comply with the proposed amendments.

Ms. Worman also has determined that for each year of the first five years the sections as proposed are in effect the public benefits anticipated as a result of enforcing the sections will be consistency in the license renewal process and clarity for license holders who seek to renew their license.

Comments on the proposal may be submitted to Kristen Worman, Deputy General Counsel, Texas Real Estate Commission, P.O. Box 12188, Austin, Texas 78711-2188 or via email to general.counsel@trec.texas.gov. The deadline for comments is 30 days after publication in the Texas Register.

The amendments are proposed under Texas Occupations Code §1101.151, which authorizes the Texas Real Estate Commission to adopt and enforce rules necessary to administer Chapters 1101 and 1102; and to establish standards of conduct and ethics for its license holders to fulfill the purposes of Chapters 1101 and 1102; and Texas Occupations Code §1102.058, which authorizes the Commission to adopt rules relating to continuing education requirements for inspectors.

The statute affected by this proposal is Chapter 1102, Texas Occupations Code. No other statute, code or article is affected by the proposed amendments.

§535.216.Renewal of License.

(a) - (e) (No change.)

(f) If the license has been expired for less than six months, the license holder may renew the license by filing the prescribed application for renewal, paying the appropriate late renewal fee to the Commission and satisfying the applicable continuing education and proof of financial responsibility requirements [not renew but must file an original application to reinstate the license and may not practice until the new license is received. If the applicant for reinstatement has held a professional inspector or real estate inspector license during the 24 months preceding the date the application is filed, no examination is required].

(g) - (i) (No change.)

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201605943

Kristen Worman

Deputy General Counsel

Texas Real Estate Commission

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 936-3093


PART 35. TEXAS STATE BOARD OF EXAMINERS OF MARRIAGE AND FAMILY THERAPISTS

CHAPTER 801. LICENSURE AND REGULATION OF MARRIAGE AND FAMILY THERAPISTS

The Texas State Board of Examiners of Marriage and Family therapists (board) proposes amendments to §§801.2, 801.44, 801.48, 801.115, 801.142, 801.143, 801.204, 801.235, and 801.236, and proposes new §801.57 and §80.58, concerning marriage and family therapists.

BACKGROUND AND PURPOSE

The proposed amendments and new sections modify requirements for technology-assisted services, supervised clinical experience, requirements for supervisors, and late renewal. The proposed amendments also implement House Bill (HB) 1449 of the 84th Legislature, Regular Session, 2015, relating to child custody evaluations and adoption evaluations conducted and testimony provided in certain suits affecting the parent-child relationship; and Senate Bill (SB) 807 and SB 1307 of the 84th Legislature, Regular Session, 2015, relating to occupational licenses for military service members, military veterans, and military spouses.

HB 1449 amended Family Code, Chapter 107, relating to Special Appointments, Child Custody Evaluations, and Adoption Evaluations. SB 1307 amended Occupations Code, Chapter 55, relating to Licensing of Military Service Members, Military Veterans, or Military Spouses.

SECTION-BY-SECTION SUMMARY

Subchapter A. Introduction.

The proposed amendments to §801.2 define "technology-assisted services" and conform the definition of "administrative law judge" to the definition in Government Code, Chapter 2003 (relating to State Office of Administrative Hearings).

Subchapter C. Guidelines for Professional Therapeutic Services and Code of Ethics.

The proposed amendments to §801.44 replace outdated language with "technology-assisted services."

The proposed amendments to §801.48 update and correct citations, grammar, and other technical form.

Proposed new §801.57 implements HB 1449, establishing requirements regarding child custody evaluations and adoption evaluations, and prohibiting licensed marriage and family therapist associates from conducting child custody evaluations or adoption evaluations unless allowed by law.

Proposed new §801.58 establishes requirements for the practice of technology-assisted services.

Subchapter F. Academic Requirements for Examination and Licensure.

The proposed amendments to §801.115 clarify the requirements for education endorsement for applicants who hold current out-of-state licenses.

Subchapter G. Experience Requirements for Licensure.

The proposed amendments to §801.142 modify requirements for supervised clinical experience for licensed marriage and family therapy associates regarding practicum hours; update language regarding technology-assisted services; delete the requirement for a licensed marriage and family associate to have a Supervisory Agreement Form on file for each location where the licensed marriage and family associate practices; and require the supervisor to retain information on where the associate practices.

The proposed amendments to §801.143 delete obsolete requirements for a continuing education course in clinical supervision and add the requirement for supervisors to take the jurisprudence exam each license renewal period.

Subchapter I. Licensing.

The proposed amendments to §801.204 add definitions for active duty, license, and U.S. Armed Forces; update definitions for military service member, military veteran, and military spouse; delete outdated language relating to licensing; and update requirements in accordance with Occupations Code, Chapter 55.

Subchapter J. License Renewal and Inactive Status.

The proposed amendment to §801.235 clarifies late renewal fees.

The proposed amendments to §801.236 add continuing education requirements to licensees on inactive status and require a licensee on inactive status to complete the jurisprudence exam before to returning to active status.

In all amended sections, the proposed amendments revise grammar and citations, correct errors, and renumber divisions as necessary.

FISCAL NOTE

Cheryl Gomez, Executive Director, has determined that for each year of the first five years that the proposed new sections and amendments will be in effect, there will be no anticipated cost or saving, nor effect on revenue, to local government as a result of the proposed rule changes. There will be an anticipated fiscal cost to state government as a result of lost revenue from waiving certain initial application fees for military service members, military veterans, and military spouses, and renewal late fees for certain military service members. Examination fees are paid to the examination provider, not to the state; therefore, the waiver provision for such fees would not affect revenue for the board. Fees under current laws and board rules to which the waiver provisions would apply for qualified applicants and license holders are as follows:

As set forth in 22 TAC §801.18 - $130 for initial application and license fee for Licensed Marriage Family Therapists (LMFT) and Licensed Marriage and Family Therapist Associates (LMFTA); $33 for late renewal fee within 90 days of expiration date and $65 late renewal fee for 91 days up to not more than one year of expiration date for a LMFT and LMFTA.

In addition, a $5 Office of Patient Protection (OPP) fee under Occupations Code, §101.307 applies to initial marriage and family therapist license applications. A $2 Texas.gov fee under Government Code, §2054.252 applies to initial therapist licensure applications.

In fiscal year 2016, the board received an average of 1 application per month from initial marriage and family therapist applicants identifying themselves as eligible for an initial license fee waiver. The late fee waiver previously existed in statute, and recent legislative amendments only broadened to some extent the scope of eligibility for active military service members; therefore, the impact of the waiver provisions may be greater with new applicants who may be eligible for the initial license application fee waiver.

Thus, an estimated loss of revenue per eligible applicant from fee waivers can be expected to be $130, plus the OPP and Texas.gov surcharges, with only minimal impact from the new legislative amendments mandating waivers of late renewal fees for active-duty military service members.

Based upon the current rate of potentially eligible marriage and family therapist license applicants of 1 per month; assuming some increase in the number of applications after the rules take effect and as they become better known; and allowing for occasional requests for late fee waivers, the department estimated rates of waiver requests at 2 per month for the first year, adding 1 per month to the estimate for each of the five years, to assume approximately 6 per month by the fifth year. The board further used the average initial application fee of $130, plus the applicable surcharges totaling a $137 initial application rate as the base rate, and rounded up to $140 as the multiplier to account for an occasional applicant eligible for a waiver other than those for which the department has received requests to date. These figures would result in an estimated $3,360 loss in revenue for year one; a $5,040 loss in revenue for year two; a $6,720 loss in revenue for year three; a $8,400 loss in revenue for year four; and an $10,080 loss in revenue for year five of the rules being in effect, for a total estimated loss of revenue for the board of approximately $33,600. However, the board does not anticipate an impact to its ability to meet the costs of administering the program through existing revenue under the current fee structure, even with this loss of revenue due to the new fee waivers.

SMALL AND MICRO-BUSINESS IMPACT ANALYSIS

Ms. Gomez has also determined that there will be no adverse effect on small businesses or micro-businesses required to comply with the sections as proposed. This was determined by interpretation of the rules that small businesses and micro-businesses will not be required to alter their business practices in order to comply with the sections.

ECONOMIC COSTS TO PERSONS AND IMPACT ON LOCAL EMPLOYMENT

There are anticipated costs to persons who are required to comply with the rules as proposed.

The proposed rules require current supervisors to complete the jurisprudence exam every renewal period. The fee for the jurisprudence exam is $39.

The proposed rules require licensees changing the status of their license from inactive to active to complete the jurisprudence exam. The fee for the jurisprudence exam is $39.

The proposed rules include a small cost for licensees on inactive status. Inactive licensees will be required to complete 15 hours of continuing education each renewal period.

There is no anticipated impact on local employment.

PUBLIC BENEFIT

In addition, Ms. Gomez has also determined that for each year of the first five years the sections are in effect, the public will benefit from adoption of the sections. The anticipated public benefit will be from improved services from licensees adhering to the new rules and from the board’s ability to more effectively license and regulate marriage and family therapists.

REGULATORY ANALYSIS

The board has determined that this proposal is not a "major environmental rule" as defined by Government Code, §2001.0225. "Major environmental rule" is defined to mean a rule the specific intent of which is to protect the environment or reduce risk to human health from environmental exposure and that may adversely affect, in a material way, the economy, a sector of the economy, productivity, competition, jobs, the environment or the public health and safety of a state or a sector of the state. This proposal is not specifically intended to protect the environment or reduce risks to human health from environmental exposure.

TAKINGS IMPACT ASSESSMENT

The board has determined that the proposed amendments and new rules do not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, do not constitute a taking under Government Code, §2007.043.

PUBLIC COMMENT

Comments on the proposal may be submitted to Cheryl Gomez, Executive Director, Texas State Board of Examiners of Marriage and Family Therapists, Mail Code 1982, P.O. Box 149347, Austin, Texas 78714-9347, or by email to mft@dshs.state.tx.us. When emailing comments, please indicate "Comments on Proposed Rules" in the subject line. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

SUBCHAPTER A. INTRODUCTION

22 TAC §801.2

STATUTORY AUTHORITY

The amendments are proposed under Occupations Code §502.152, which authorizes the board to adopt rules necessary for the performance of its duties; Occupations Code §55.002, §55.004, and §55.007, which authorize the board to adopt rules related to licensing military service members, military veterans, and military spouses; Occupations Code §55.007; HB 1449, Article 5, which directs the board to adopt rules that require license holders to comply with Family Code, Chapter 107, Subchapters D-F;

The amendments and new rules affect Occupations Code, Chapter 502.

§801.2.Definitions.

The following words and terms when used in this chapter, shall have the following meanings unless the context indicates otherwise.

(1) (No change.)

(2) Act--[Licensed Marriage and Family Therapist Act relating to the licensing and regulation of marriage and family therapists,] Occupations Code, Chapter 502 (relating to Marriage and Family Therapists).

(3) Administrative Law Judge (ALJ)--An individual who presides at an administrative hearing held under Government Code, Chapter 2001 (relating to Administrative Procedure), as defined in Government Code, Chapter 2003 (relating to State Office of Administrative Hearings). [A person within the State Office of Administrative Hearings who conducts hearings under this subchapter on behalf of the Board.]

(4) APA--The Administrative Procedure Act, [Texas] Government Code, Chapter 2001.

(5) - (6) (No change.)

(7) Client--An individual, family, couple, group, or organization who receives or has received services from a person identified as a marriage and family therapist who is either licensed [or unlicensed] by the board or unlicensed.

(8) - (9) (No change.)

(10) Department--The Department of State Health Services.

(11) Endorsement--The process whereby the board reviews licensing requirements that a license applicant [for licensure] completed while under the jurisdiction of an out-of-state [a different] marriage and family therapy regulatory board [from another state]. The board may accept, deny or grant partial credit for requirements completed in a different jurisdiction.

(12) - (15) (No change.)

(16) Investigator--A professional complaint investigator employed by the department [Department of State Health Services].

(17) - (25) (No change.)

(26) Recognized religious practitioner--A rabbi, clergyman, or person of similar status who is a member in good standing of and accountable to a legally recognized denomination or legally recognizable religious denomination or legally recognizable religious organization and other individuals participating with them in pastoral counseling if:

(A) the therapy activities are within the scope of the performance of their regular or specialized ministerial duties and are performed under the auspices of sponsorship of an established and legally cognizable church, denomination or sect, or an integrated auxiliary of a church as defined in Title [Federal Tax Regulations,] 26, Code of Federal Regulations [Regulation] 1.6033-2, subsection (h) (as in effect in 2008) (relating to (Internal Revenue) Returns by exempt organizations (taxable years beginning after December 31, 1969) and returns by certain nonexempt organizations (taxable years beginning after December 31, 1980));

(B) - (C) (No change.)

(27) - (28) (No change.)

(29) Technology-assisted services--Services that use technologies and devices that enable electronic communication and information exchange to provide therapy or supervision between a licensee in one location and a client or supervisee in another location.

(30) [(29)] Texas Open Meetings Act--Government Code, Chapter 551.

[(30) Texas Public Information Act--Government Code, Chapter 552.]

(31) Texas Public Information Act--Government Code, Chapter 552.

(32) [(31)] Therapist--A [For the purposes of this chapter, a] Texas licensed marriage and family therapist or a Texas licensed marriage and family therapist associate.

(33) [(32)] Waiver--The suspension of educational, professional, and/or examination requirements for applicants who meet licensing requirements [the criteria for licensure] under special conditions.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201606007

Jennifer Smothermon, M.A., LPC, LMFT

Chair

Texas State Board of Examiners of Marriage and Family Therapists

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 776-6972


SUBCHAPTER C. GUIDELINES FOR PROFESSIONAL THERAPEUTIC SERVICES AND CODE OF ETHICS

22 TAC §§801.44, 801.48, 801.57, 801.58

STATUTORY AUTHORITY

The amendments and new rules are proposed under Occupations Code §502.152, which authorizes the board to adopt rules necessary for the performance of its duties; Occupations Code §55.002, §55.004, and §55.007, which authorize the board to adopt rules related to licensing military service members, military veterans, and military spouses; Occupations Code §55.007; HB 1449, Article 5, which directs the board to adopt rules that require license holders to comply with Family Code, Chapter 107, Subchapters D-F.

The amendments and new rules affect Occupations Code, Chapter 502.

§801.44.Relationships with Clients.

(a) - (d) (No change.)

(e) No commission or rebate or any other form of remuneration shall be given or received by a licensee for the referral of clients for professional services. A licensee employed or under contract with a chemical dependency facility or a mental health facility, shall comply with the requirements in [the Texas] Health and Safety Code, §164.006[,] (relating to Soliciting and Contracting with Certain Referral Sources) [soliciting and contracting with certain referral sources]. Compliance with [the Treatment Facilities Marketing Act, Texas] Health and Safety Code, Chapter 164 (relating to Treatment Facilities Marketing and Admission Practices)[,] shall not be considered as a violation of state law regarding illegal remuneration.

(f) - (p) (No change.)

(q) A licensee who engages in technology-assisted services [interactive therapy via the telephone or internet] must provide the client with the licensee’s [his/her ] license number and information on how to contact the board by telephone, electronic communication, or mail. The licensee[, and] must comply with [adhere to] all other provisions of this chapter.

(r) A licensee shall [only] offer only those services that are within his or her professional competency, and the services provided shall be within accepted professional standards of practice and appropriate to the needs of the client.

(s) (No change.)

(t) A licensee shall evaluate a client's progress on a continuing basis to guide service delivery and shall [will ] make use of supervision and consultation as indicated by the client's needs.

(u) - (z) (No change.)

§801.48.Record Keeping, Confidentiality and Release of Records, and Required Reporting.

(a) Communication between a licensee and client and the client's records, however created or stored, are confidential under the provisions of the [Texas] Health and Safety Code, Chapter 611(relating to Mental Health Records), and other state or federal statutes or rules where such statutes or rules apply to a licensee's practice.

(b) A licensee shall not disclose any communication, record, or identity of a client except as provided in [Texas] Health and Safety Code, Chapter 611, or other state or federal statutes or rules.

(c) A licensee shall comply with [Texas] Health and Safety Code, Chapters 181 (relating to Medical Records Privacy) and 611, and other state or federal statutes or rules where such statutes or rules apply to a licensee's practice, concerning access to and release of mental health records and confidential information.

(d) A licensee shall report or releaseinformation as [if] required by [any of] the following statutes:

(1) [Texas] Family Code, Chapter 261 (relating to Investigation of Report of Child Abuse or Neglect) [2614, concerning abuse or neglect of minors];

(2) [Texas] Human Resources Code, Chapter 48 (relating to Investigations and Protective Service for Elderly Persons and Persons with Disabilities)[, concerning abuse, neglect, or exploitation of elderly or disabled persons];

(3) [Texas] Health and Safety Code, Chapter 161, Subchapter L (relating to Abuse, Neglect, and Unprofessional or Unethical Conduct in Healthcare Facilities) [K, §161.131 et seq., concerning abuse, neglect, and illegal, unprofessional, or unethical conduct in an in-patient mental health facility, a chemical dependency treatment facility, or a hospital providing comprehensive medical rehabilitation services];

(4) [Texas] Civil Practice and Remedies Code, §81.006 (relating to Duty to Report Sexual Exploitation by a Mental Health Services Provider)[, concerning sexual exploitation by a mental health services provider]; and

(5) [A licensee shall comply with Texas] Occupations Code, Chapter 109 (relating to Release of Sex Offender Treatment Information)[, relating to the release and exchange of information concerning the treatment of a sex offender].

(e) - (h) (No change.)

§801.57.Child Custody Evaluations.

(a) Licensees shall comply with all applicable statutes and rules, including but not limited to Family Code, Chapter 107, Subchapters D, E, and F (relating to Child Custody Evaluation, Adoption Evaluation, and Evaluations in Contested Adoptions).

(b) When a licensee who has conducted a court-ordered child custody evaluation or adoption evaluation receives any complaint relating to the outcome of the evaluation, the licensee must report the complaint to the court that ordered the evaluation. The board reviews only complaints regarding forensic evaluations that allegedly violated specific board rules.

(c) Disclosure of confidential information in violation of Family Code, §107.111 (relating to Child Custody Evaluator Access to Investigative Records of Department of Family and Protective Services; Offense) or §107.163 (Adoption Evaluator Access to Investigative Records of Department of Family and Protective Services; Offense) is grounds for disciplinary action, up to and including license revocation.

(d) A licensee may not provide therapy and any other type of service, including but not limited to a child custody evaluation or parenting facilitation, in the same case, whether such services are delivered sequentially or simultaneously.

(e) A licensee may not offer an expert opinion or recommendation relating to the conservatorship of or possession of or access to a child unless the licensee has conducted a child custody evaluation relating to the child in accordance with Family Code, Chapter 107, Subchapter D.

(f) Before beginning child custody evaluations or adoption evaluations, a licensee shall inform the parties in writing of:

(1) the limitations on confidentiality in the evaluation process; and

(2) the basis of fees and costs and the method of payment, including any fees associated with postponement, cancellation, and/or nonappearance, and the parties’ pro rata share of the fees and costs as determined by the court order or written agreement of the parties.

(g) A Licensed Marriage and Family Therapist Associate shall not conduct child custody evaluations or adoption evaluations unless qualified by another professional license to provide such services or otherwise allowed by law.

§801.58.Technology-Assisted Services.

(a) Licensees who provide marriage and family therapy to clients or supervision to supervisees outside the State of Texas shall comply with the laws and rules of this board and of the out-of-state regulatory authority.

(b) Licensees who provide treatment, consultation, and supervision using technology-assisted services shall meet the same standards of appropriate practice as licensees who practice in traditional (i.e., in-person) settings.

(c) In accordance with Occupations Code, §502.251 (relating to License Required), a person may not practice as a marriage and family therapist unless the person holds a license under this chapter or is exempt under Occupations Code, §502.004 (relating to Application of Chapter).

(d) Licensees may use technology-assisted services only after receiving appropriate education, training, and/or supervised experience in using relevant technology. A therapist who uses technology-assisted services must maintain documentation of academic preparation and supervision in the use of technology-assisted services as part of the therapist’s academic program or the substantial equivalent provided through at least 15 hours of continuing education and 2 hours every subsequent renewal period. Licensees must comply with this subsection by January 1, 2018.

(e) A licensee shall not render therapy using technology-assisted services without complying with the following at the onset of each session:

(1) fully verifying the location and identity of the client, to the most reasonable extent possible;

(2) disclosing the identity and applicable credentials of the licensee; and

(3) obtaining appropriate consents from clients.

(f) Before providing technology-assisted services, licensees shall determine whether a client is a minor. Upon determining that a client is a minor, and before providing technology-assisted services, licensees shall obtain required consent from a parent or guardian and shall verify the identity of the parent, guardian, or other person consenting to the minor’s treatment.

(g) The licensee shall determine if technology-assisted service is an appropriate delivery of treatment or supervision, considering the professional, intellectual, or emotional needs of the client or supervisee.

(h) Informed consent shall include, at a minimum, information that defines electronic service delivery as practiced by the licensee and the potential risks and ethical considerations. The licensee shall obtain and maintain written and/or electronic evidence documenting appropriate client informed consent for the use of technology-assisted services. The licensee shall ensure that the informed consent complies with other informed consent requirements in this chapter and shall include the following:

(1) identification of the client, the therapist, and the therapist’s credentials;

(2) list of services provided by the licensee using technology-assisted services;

(3) client agreement that the therapist determines on an on-going basis whether the condition being assessed and/or treated is appropriate for technology-assisted services;

(4) details on security measures taken with the use of technology-assisted services, as well as potential risks to privacy notwithstanding such measures;

(5) information regarding secure protocols and back-up plans in case of technical failure;

(6) the licensee’s credentials or training to engage in technology-assisted services, physical location of practice, and contact information;

(7) risks and benefits of engaging in the use of technology;

(8) emergency procedures to follow when the therapist is not available;

(9) information collected and any passive tracking mechanisms used;

(10) third-party websites or services used by the licensee to facilitate technology-assisted services; and

(11) an explanation of how records are maintained electronically, including, but not limited to, encryption type and record security, and the archival storage period for transaction records.

(i) Therapists who use technology-assisted services shall meet or exceed applicable federal and state legal requirements of health information privacy, including, but not limited to, compliance with the Health Insurance Portability and Accountability Act of 1966 (HIPAA), Public Law 104-191; The Health Information Technology for Economic and Clinical Health (HITECH) Act, 42 U.S.C. Chapter 156, Subchapter III; Health and Safety Code, Chapter 181 (relating to Medical Records Privacy); and state privacy, confidentiality, and security rules.

(j) Licensees must comply with this section by January 1, 2018.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201606008

Jennifer Smothermon, M.A., LPC, LMFT

Chair

Texas State Board of Examiners of Marriage and Family Therapists

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 776-6972


SUBCHAPTER F. ACADEMIC REQUIREMENTS FOR EXAMINATION AND LICENSURE

22 TAC §801.115

STATUTORY AUTHORITY

The amendments are proposed under Occupations Code §502.152, which authorizes the board to adopt rules necessary for the performance of its duties; Occupations Code §55.002, §55.004, and §55.007, which authorize the board to adopt rules related to licensing military service members, military veterans, and military spouses; Occupations Code §55.007; HB 1449, Article 5, which directs the board to adopt rules that require license holders to comply with Family Code, Chapter 107, Subchapters D-F.

The amendments affect Occupations Code, Chapter 502.

§801.115.Academic Requirements and Supervised Clinical Practicum Equivalency for Applicants Currently Licensed in Another Jurisdiction.

An applicant currently licensed as a marriage and family therapist in another jurisdiction of the United States, who does not meet the academic requirements in §801.114 of this title (relating to Academic Course Content) may be considered to have met the requirements according to the following.

(1) If an applicant has been licensed as a marriage and family therapist in a United States jurisdiction for the 5 years immediately preceding the application, the academic requirements (including the practicum) will be considered to have been met. If licensed for any other 5-year period [of 5 years], the board will determine whether academic requirements have been met.

(2) - (3) (No change.)

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201606009

Jennifer Smothermon, M.A., LPC, LMFT

Chair

Texas State Board of Examiners of Marriage and Family Therapists

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 776-6972


SUBCHAPTER G. EXPERIENCE REQUIREMENTS FOR LICENSURE

22 TAC §801.142, §801.143

STATUTORY AUTHORITY

The amendments are proposed under Occupations Code §502.152, which authorizes the board to adopt rules necessary for the performance of its duties; Occupations Code §55.002, §55.004, and §55.007, which authorize the board to adopt rules related to licensing military service members, military veterans, and military spouses; Occupations Code §55.007; HB 1449, Article 5, which directs the board to adopt rules that require license holders to comply with Family Code, Chapter 107, Subchapters D-F.

The amendments affect Occupations Code, Chapter 502.

§801.142.Supervised Clinical Experience Requirements and Conditions.

The following supervised clinical experience requirements and conditions shall apply.

(1) Except as specified in subparagraph (A)(i)(III) and (A)(ii)(II) of this paragraph, only an LMFT Associate may accrue hours of supervised clinical experience. [Supervised clinical experience accrued in Texas may only be accrued under licensure as a Licensed Marriage and Family Therapist Associate (with the exceptions noted in subparagraph (A)(i)(III) and (iii)(II) of this paragraph.]

(A) The applicant must have completed a minimum of two years of work experience in marriage and family therapy services after conferral of the master's or doctoral degree in accordance with this chapter and must include the following:

(i) 3,000 hours of board-approved marriage and family therapy practice:

(I) - (II) (No change.)

(III) of the 3,000 hours, no more than 500 hours may be transferred from a Commission on Accreditation for Marriage and Family Therapy Education (COAMFTE) accredited doctoral program; [and]

(IV) if, during the supervised clinical practicum, the applicant has completed 300 hours of experience (direct and non-direct), including a minimum of 75 hours of direct client contact with couples and families out of an overall minimum of 150 hours of direct client contact, the board may count excess practicum hours toward the experience requirements of this subchapter if:

(-a-) the hours were part of the applicant's academic practicum or internship accumulated after the commencement of the applicant's planned graduate program;

(-b-) the relational, or other direct client contact hours and/or non-direct hours are in excess of the 300-hour practicum; and

(-c-) the total of direct plus non-direct hours does not exceed 400 hours; and

(V) [(IV)] the 3,000 hours do not begin to accumulate [cannot begin accumulating] before the issuance date of the license, except as described in subclause (III) of this clause.

[(ii) a board-approved Supervisory Agreement Form, which requires the following:]

[(I) submission of a Supervisory Agreement Form to the board which designates the supervisor and the location of practice and which must be submitted to the board with the license application along with a copy of the license certificate of the supervisor, indicating that the supervisor's license is current and the supervisor is a board-approved supervisor; or if one or more Supervisory Agreement Form(s) are submitted after licensure, submission of a Supervisory Agreement Form(s) within 60 days of commencement of supervised services, accompanied by a copy of the license certificate of the supervisor, indicating that the supervisor's license is current and the supervisor is a board-approved supervisor;]

[(II) official board approval of the completed Supervisory Agreement Form after submission, as evidenced by receipt of an associate license for which the application package included a completed Supervisory Agreement Form, or by written verification from the board; and]

[(III) submission of additional Supervisory Agreement Form(s) and verification of the supervisor's license and board-approved supervisor status to the board if there is more than one location of practice, if there is a change in practice location, or if supervisors are added or changed. Additional forms must be approved in writing by the board at the beginning of the supervision process.]

(ii) [(iii)] at least 200 hours of board-approved supervision, which requires:

(I) at least 100 hours of individual supervision;

(II) no more than 100 hours being transferred from the graduate program;

(III) at least 50 hours of the post-graduate supervision must be individual supervision;

(IV) of the 200 hours, no more than 50 hours may be by technology-assisted services [telephonic or electronic media];

(V) a minimum of one hour of supervision every week, except for good cause shown; and

(VI) a supervision hour is no less than 50 minutes.

(B) An associate may practice marriage and family therapy in any setting under supervision, such as a private practice, public or private agencies, hospitals, etc.

(C) During the post graduate supervision, both the supervisor and the associate may have disciplinary actions taken against their licenses for violations of the Act or this chapter.

(D) Within 60 days of the initiation of supervision, a supervisor must process and maintain a complete supervision file on the associate. The supervision file must include:

(i) a photocopy of the submitted Supervisory Agreement Form;

(ii) proof of board approval of the Supervisory Agreement Form; and

(iii) a record of all locations at which the associate will practice.

[(D) Supervision must be conducted under a Supervisory Agreement Form, which must be submitted to the board on the official form within 60 days of the initiation of supervision. The Supervisory Agreement Form submitted to the board must be approved by the board. Fees charged by a supervisor during the course of supervision, which occurred without a board-approved supervision contract in place and subsequently resulted in the supervised experience hours of the supervisee being denied by the board solely on the basis that there was no board approved Supervisory Agreement Form in place within 60 days of the initiation of supervision, must be reimbursed to the supervisee.]

(E) Group supervision [supervised experience ] of an associate may count toward an associate's supervision requirement only if the supervision group consisted of a minimum of three and no more than six associates during the supervision hour.

(F) Individual supervision [supervised experience] of an associate may count toward the associate's supervision requirement only if the supervision consisted of no more than two associates.

(G) (No change.)

(H) The associate may receive credit for up to 500 clock hours toward the required 3,000 hours of supervised clinical services by providing services via technology-assisted services [telephonic or other electronic media], as approved by the supervisor.

(2) Except as specified in paragraph (1)(A)(i)(III) and (1)(A)(ii)(II) of this section, hours of supervision [Supervision ] and supervised clinical experience accrued toward an out-of-state LMFT license may be [licensure as a Licensed Marriage and Family Therapist in another jurisdiction are] accepted only by endorsement [only (except as noted in paragraph (1)(A)(i)(III) and (iii)(II) of this section].

(A) (No change.)

(B) If an applicant has been licensed as a marriage and family therapist in a United States jurisdiction for the 5 years immediately preceding the application, the supervised clinical experience requirements will be considered to have been met. If licensed for any other 5-year period [of 5 years], the board will determine whether clinical experience requirements have been met.

§801.143.Supervisor Requirements.

(a) Supervisors are recognized by the board when subsection (a) or (b) of this section is met by submitting an application which includes the applicable fee and the following:

(1) (No change.)

(2) one of the following:

(A) successful completion of a one-semester graduate course in marriage and family therapy supervision from an accredited institution; or

(B) a 40-hour continuing education course in clinical supervision [that meets the minimum requirements of the board and is ]offered by a board-approved provider; and

(3) (No change.)

(b) - (n) (No change.)

(o) To maintain approval as a supervisor, a supervisor must successfully complete the jurisprudence exam each renewal period.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201606010

Jennifer Smothermon, M.A., LPC, LMFT

Chair

Texas State Board of Examiners of Marriage and Family Therapists

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 776-6972


SUBCHAPTER I. LICENSING

22 TAC §801.204

STATUTORY AUTHORITY

The amendment is proposed under Occupations Code §502.152, which authorizes the board to adopt rules necessary for the performance of its duties; Occupations Code §55.002, §55.004, and §55.007, which authorize the board to adopt rules related to licensing military service members, military veterans, and military spouses; Occupations Code §55.007; HB 1449, Article 5, which directs the board to adopt rules that require license holders to comply with Family Code, Chapter 107, Subchapters D-F.

The amendments affect Occupations Code, Chapter 502.

§801.204.Licensing of Military Service Members, Military Veterans, and Military Spouses.

(a) This section implements [sets out] licensing procedures in accordance with [for military service members, military veterans, and military spouses required under] Occupations Code, Chapter 55 (relating to Licensing of Military Service Members, Military Veterans, and Military Spouses). The following definitions apply in [For purposes of] this section:

(1) Active duty--Current full-time military service in the U.S. Armed Forces or active duty military service as a member of the Texas military forces, as defined by Government Code, §437.001 (relating to Texas Military), or similar military service of another state.

(2) License--A license, certificate, registration, permit, or other form of authorization required by law or a state agency rule that must be obtained by an individual to engage in a particular business.

(3) [(1)] Military service member--A ["Military service member" means a] person who is on active duty [currently serving in the armed forces of the United States, in a reserve component of the armed forces of the United States, including the National Guard, or in the state military service of any state].

(4) [(2)] Military spouse--A ["Military spouse" means a] person who is married to a military service member [who is currently on active duty].

(5) [(3)] Military veteran--A ["Military veteran" means a] person who has served on active duty and who was discharged or released from active duty [in the army, navy, air force, marine corps, or coast guard of the United States, or in an auxiliary service of one of those branches of the armed forces].

(6) U.S. Armed Forces--The U.S. Army, Navy, Air Force, Coast Guard, or Marine Corps or a reserve unit of one of those branches of the Armed Forces.

(b) - (e) (No change.)

(f) An applicant who is a military service member, military veteran, or military spouse who holds a current unrestricted license issued by another jurisdiction that has substantially equivalent licensing requirements shall complete and submit an application form and a supplemental application form for military service member, military veteran, or military spouse. The applicant must satisfy the application and supplemental application requirements and meet the substantial equivalency requirements of the out-of-state jurisdiction. The applicant may not be subject to unresolved allegations related to the out-of-state license. The applicant must be free of any criminal background relevant to the license and must be free of any facts or circumstances that would provide grounds for denial of the license. As soon as practicable after the applicant submits a complete application, the department will process the application and will issue a license to an applicant whose application meets the requirements of this section. A license issued in accordance with this section will have the same term as the applicable license type otherwise issued under the Act and this subchapter. Renewal of the license shall be in accordance with subsection (i) of this section. [fee. The board shall issue a license to a qualified applicant who holds such a license as soon as practicable and the renewal of the license shall be in accordance with subsection (i) of this section.]

(g) In accordance with Occupations Code, §55.004(c) (relating to Alternative Licensing for Military Service Members, Military Veterans, and Military Spouses), the executive director may waive any prerequisite to obtaining a license after reviewing the applicant's credentials and determining that the applicant holds a license issued by another jurisdiction that has licensing requirements substantially equivalent to those of this state.

(h) An applicant who is a military service member, military veteran, or military spouse and who held an unrestricted registration in this state within the five years preceding the application date shall complete and submit an application form and a supplemental application form for military service member, military veteran, or military spouse. The applicant must satisfy the application and supplemental application requirements. The applicant may not be subject to unresolved allegations related to the registration. The applicant must be free of any criminal background relevant to the registration and must be free of any facts or circumstances that would provide grounds for denial of the registration. As soon as practicable after the applicant submits a complete application, the department will process the application and will issue a registration to an applicant whose application meets the requirements of this section. Renewal of the registration shall be in accordance with subsection (i) of this section.

[(h) A military spouse who within the five years preceding the application date held the license in this state that expired while the applicant lived in another state for at least six months is qualified for licensure based on the previously held license, if there are no unresolved complaints against the applicant and if there is no other bar to licensure, such as criminal background or non-compliance with a board order.]

(i) If the board issues an initial license to an applicant who is a military service member, military veteran, or military spouse in accordance with subsection (f) of this section, the board shall assess whether the applicant has met all licensing requirements of this state by virtue of the current license issued by another jurisdiction. The board shall provide this assessment in writing to the applicant at the time the license is issued. If the applicant has not met all licensing requirements of this state, the applicant must provide proof of completion at the time of the first application for license renewal. A license shall not be renewed, shall be allowed to expire, and shall become ineffective if the applicant does not provide proof of completion at the time of the first application for license [licensure] renewal.

(j) Notwithstanding any other law, the department will waive the license application fee for an applicant described in paragraph (1) or (2) of this subsection. An applicant shall provide any documentation requested by the department to verify that the applicant is:

(1) a military service member or military veteran whose military service, training, or education substantially meets all applicable requirements for the license; or

(2) a military service member, military veteran, or military spouse who holds a current license issued by an out-of-state regulatory authority that has license requirements that are substantially equivalent to the requirements for the license in this state.

(k) For license renewal, the department will exempt an individual who holds a license issued by the department from any increased fee or other penalty imposed for failing to renew the license in a timely manner if the individual establishes to the satisfaction of the program director that the individual failed to renew the license in a timely manner because the individual was serving as a military service member.

(l) A military service member who holds a license is entitled to two years of additional time beyond the expiration date of the license to complete:

(1) any continuing education requirements; and

(2) any other requirement related to the renewal of the military service member’s registration.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201606011

Jennifer Smothermon, M.A., LPC, LMFT

Chair

Texas State Board of Examiners of Marriage and Family Therapists

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 776-6972


SUBCHAPTER J. LICENSE RENEWAL AND INACTIVE STATUS

22 TAC §801.235, §801.236

STATUTORY AUTHORITY

The amendments and new rules are proposed under Occupations Code §502.152, which authorizes the board to adopt rules necessary for the performance of its duties; Occupations Code §55.002, §55.004, and §55.007, which authorize the board to adopt rules related to licensing military service members, military veterans, and military spouses; Occupations Code §55.007; HB 1449, Article 5, which directs the board to adopt rules that require license holders to comply with Family Code, Chapter 107, Subchapters D-F.

The amendments and new rules affect Occupations Code, Chapter 502.

§801.235.Late Renewal.

(a) A person who renews a license after the expiration date but on or within 90 days after the expiration date shall pay the renewal fee plus one-fourth of the current biennial license renewal fee. If a person's license has been expired for 90 days but less than one year the person may renew the license by paying to the board the renewal fee and a fee that is equal to one-half [one-fourth ] of the current biennial license renewal fee.

(b) A person whose license was not renewed within one year of the expiration date may seek to obtain a new license by reapplying for a license [licensure], submitting to examination, and complying with current requirements and procedures for obtaining an original license.

(c) (No change.)

§801.236.Inactive Status.

(a) (No change.)

[(b) If a licensee fails to renew his or her license because the licensee is called to or on active duty with the armed forces of the United States, the licensee or the licensee's authorized representative may request that the license be declared inactive or be renewed. A request for inactive status shall be made in writing to the board prior to expiration of the license or within one year from the expiration date. This subsection is an exception to the requirement in subsection (a) of this section that the request be made prior to expiration of the license. A request for renewal may be made before or after the expiration date when related to active duty with the armed forces of the United States.]

[(1) If the request is made by the licensee's authorized representative, the request must include a copy of the appropriate power of attorney or written evidence of a spousal relationship.]

[(2) The written request shall include a copy of the official transfer orders of the licensee or other official military documentation showing that the licensee is called to or on active duty.]

[(3) The payment of the inactive status fee, late renewal fee, and licensure renewal penalty fee is waived for a licensee under this subsection.]

[(4) An active duty licensee shall be allowed to renew under this subsection without proof of continuing education hours if proof is required for renewal; however, the licensee must submit proof of completion of the required number of continuing education hours by the end of the following time period. The time period shall start on the actual date of renewal of the license and be equal to the length of time the licensee was on active duty during the continuing education period or following expiration of the license. If the licensee fails to submit proof of continuing education by the end of the time period, the board may suspend or revoke or deny renewal of the license.]

[(5) The written request shall include a current address and telephone number for the licensee or the licensee's authorized representative.]

[(6) The board may periodically notify the licensee or the licensee's authorized representative that the license of the licensee remains in inactive status, if applicable.]

[(7) Except in extraordinary circumstances, a licensee on active duty shall notify the board that the licensee is on active duty. The board shall note in the licensee's file that the licensee may be eligible for renewal under this subsection.]

[(8) If a licensee is a civilian impacted or displaced for business purposes due to a national emergency or war, the licensee or the licensee's authorized representative may request that the license be declared inactive in the same manner as described in this subsection for military personnel. The written request shall include an explanation of how the licensee is impacted or displaced, which explanation shall be on the official letterhead of the licensee's business.]

(b) [(c)] An inactive status period shall begin on the first day of the month following board approval and payment of an inactive status fee.

(c) [(d)] All privileges and fees do not apply[, fees, and continuing education requirements are not applicable] during the period of inactive status. A person may not act as a therapist or represent himself or herself as a therapist during the period of inactive status.

(d) Licensees on inactive status shall complete 15 clock hours of continuing education requirements each renewal period. Completion of approved continuing education of no less than 15 hours must be reported by the licensee at the time of renewal.

[(e) Continuing education credit cannot be earned while on inactive status.]

(e) [(f)] A person is subject to investigation and action under Subchapter L of this chapter (relating to Complaints and Violations) during the period of inactive status.

(f) [(g)] A licensee may return to active status by submitting a written request to the board, completing the jurisprudence examination within 30 days immediately preceding the written request to the board, and obtaining [, and] approval from[by,] the board. Active status shall begin the first day of the month following board approval and payment of a license fee.

[(h) Upon return to active status, the licensee must begin accruing continuing education hours in order to fulfill the continuing education requirements prior to the next licensure renewal.]

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 18, 2016.

TRD-201606013

Jennifer Smothermon, M.A., LPC, LMFT

Chair

Texas State Board of Examiners of Marriage and Family Therapists

Earliest possible date of adoption: January 1, 2017

For further information, please call: (512) 776-6972