S T A T E O F N E W Y O R K
________________________________________________________________________
6307
2009-2010 Regular Sessions
I N S E N A T E
November 20, 2009
___________
Introduced by Sen. STAVISKY -- read twice and ordered printed, and when
printed to be committed to the Committee on Rules
AN ACT to amend the education law, in relation to the practice of public
accountancy by accountants who are not licensed in New York state; and
to repeal certain provisions of such law relating thereto
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivisions 5, 6, and 7 of section 7401-a of the education
law, as added by chapter 651 of the laws of 2008, are amended to read as
follows:
5. "HOME OFFICE" IS THE LOCATION SPECIFIED BY THE CLIENT AS THE
ADDRESS TO WHICH A SERVICE DESCRIBED IN PARAGRAPH C OF SUBDIVISION TWO
OF SECTION SEVENTY-FOUR HUNDRED SIX OF THIS ARTICLE IS DIRECTED.
6. "Principal place of business" means the office location designated
by the licensee from which the person directs, controls, and coordinates
his or her professional services.
[6.] 7. "Public accountant" or "PA" means any person who has received
a license from the department as a public accountant for the practice of
public accountancy.
[7.] 8. "State" means any state of the United States, the District of
Columbia, Puerto Rico, the U.S. Virgin Islands, and Guam.
S 2. Section 7406 of the education law, as amended by chapter 651 of
the laws of 2008, is amended to read as follows:
S 7406. Limited permits and [temporary] practice [permits] PRIVILEGE.
1. Limited permits. On recommendation of the board, the department may
issue a limited permit to an applicant of good moral character, who is
the holder of a certificate, license or degree in a foreign country
constituting a recognized qualification for the performance in such
country of the acts set forth in section seventy-four hundred one of
this article, provided the applicant has professional qualifications
that are determined by the board to be significantly comparable to the
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD15077-02-9
S. 6307 2
licensure requirements for certified public accountancy pursuant to this
article, and the applicant resides or has a place for the regular trans-
action of business within the state, and equal recognition is granted by
the foreign country concerned to certified public accountants or public
accountants licensed in the United States. Such limited permit shall be
valid for a period of two years and may be renewed on recommendation of
the board. Such permit shall authorize the applicant to use only the
title or designation under which he or she is generally known in his or
her own country, followed by the name of the country from which he or
she received his or her certificate, license or degree, notwithstanding
the provisions of subdivision two of section seventy-four hundred eight
of this article. THE FEE FOR EACH LIMITED PERMIT AND EACH RENEWAL SHALL
BE ESTABLISHED IN REGULATION BY THE BOARD OF REGENTS.
2. [Temporary practice permits] PRACTICE PRIVILEGE. a. [On recommenda-
tion of the board, a] A certified public accountant, licensed by another
state which the board of regents OR ITS DESIGNEE has determined to have
significantly comparable certified public accountant licensure require-
ments, or whose individual licensure qualifications are verified by the
department OR ITS DESIGNEE to be significantly comparable to New York's
requirements, and in good standing, who intends to perform the services
in subdivisions one and two of section seventy-four hundred one of this
article may [temporarily] practice public accountancy in this state, if
the certified public accountant:
(1) holds a valid license to practice public accountancy in the other
state, AND
(2) practices public accountancy in another state that is his or her
principal place of business[, and
(3) obtains from the department a temporary practice permit].
b. The [temporary] practice [permit] PRIVILEGE allows such certified
public accountant, who meets the requirements of paragraph a of this
subdivision to practice public accountancy in this state. [Each tempo-
rary practice permit shall allow the holder to practice in this state
for an aggregate total of one hundred eighty days during the twelve
month period beginning on the effective date of the permit.]
c. [Applications for the temporary practice permit shall be submitted
to the department through an electronic means as prescribed by the
commissioner. After the department renders a timely initial determi-
nation that the applicant has submitted the information necessary to
verify that the requirements of paragraph a of this subdivision are
satisfied, applications for temporary practice permits shall be proc-
essed by the department within thirty days. During such thirty day proc-
essing period, the applicant may practice; provided, however, that if
the application is denied the applicant shall cease the practice of
public accountancy in the state of New York.] AN INDIVIDUAL WHO HAS BEEN
GRANTED PRACTICE PRIVILEGES UNDER THIS SECTION WHO, FOR ANY ENTITY WITH
ITS HOME OFFICE IN THIS STATE, PERFORMS ANY OF THE SERVICES IN PARAGRAPH
A, C, OR D OF SUBDIVISION ONE OF SECTION SEVENTY-FOUR HUNDRED ONE-A OF
THIS ARTICLE MAY ONLY DO SO THROUGH A FIRM WHICH HAS OBTAINED A PERMIT
UNDER SECTION SEVENTY-FOUR HUNDRED EIGHT OF THIS ARTICLE.
d. Any certified public accountant who practices in this state pursu-
ant to this section, and any firm that employs such certified public
accountant to provide such services in New York, consents to all of the
following as a condition of the exercise of such [temporary] practice
privilege:
(1) to the personal and subject matter jurisdiction and disciplinary
authority of the board of regents UNDER SECTIONS SIXTY-FIVE HUNDRED
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NINE THROUGH SIXTY-FIVE HUNDRED ELEVEN OF THIS TITLE, AS IF THE PRACTICE
PRIVILEGE IS A "LICENSE," AND AN INDIVIDUAL WITH A PRACTICE PRIVILEGE A
"LICENSEE," FOR PURPOSES OF THOSE SECTIONS;
(2) to comply with this article, the rules of the board of regents and
the regulations of the commissioner; and
(3) to the appointment of the secretary of state or other public offi-
cial acceptable to the department, in the certified public accountant's
state of licensure or the state in which the firm has its principal
place of business, as the certified public accountant or firm's agent
upon whom process may be served in any action or proceeding by the
department against such certified public accountant or firm.
e. [No more than one temporary practice permit may be issued to any
individual applicant provided that each permit may be renewed by the
department up to three times such that an individual shall practice for
no more than four years within a five year time period under the
provisions of this section. Such renewals may be granted upon receipt of
written notice from the permit holder, provided that the applicant
remains in good standing and in compliance with all applicable laws,
rules and regulations.] FOR PURPOSES OF THIS SUBDIVISION, THE BOARD OF
REGENTS MAY DETERMINE THAT NATIONALLY-RECOGNIZED CERTIFIED PUBLIC
ACCOUNTANT LICENSURE REQUIREMENTS ARE SIGNIFICANTLY COMPARABLE TO NEW
YORK'S REQUIREMENTS, SUCH THAT A STATE DETERMINED TO HAVE LICENSURE
REQUIREMENTS SIGNIFICANTLY COMPARABLE TO THE UNIFORM REQUIREMENTS, OR AN
INDIVIDUAL WHOSE LICENSURE QUALIFICATIONS ARE DETERMINED TO BE SIGNIF-
ICANTLY COMPARABLE TO THE UNIFORM REQUIREMENTS, MAY QUALIFY FOR THE
PRACTICE PRIVILEGE UNDER PARAGRAPH A OF THIS SUBDIVISION.
f. (1) A person who wishes to practice public accountancy in this
state but does not meet the requirements of paragraph a of this subdivi-
sion is subject to the full licensing and registration requirements of
this article.
(2) In the event the license from the other state of the certified
public accountant's principal place of business is no longer valid or in
good standing, or that the certified public accountant has had any final
disciplinary action taken [against his or her license] by the licensing
or disciplinary authority of any other state concerning the practice of
public accountancy THAT HAS RESULTED IN THE SUSPENSION OR REVOCATION OF
HIS OR HER LICENSE, the certified public accountant shall cease offering
to perform or performing such services in this state individually and on
behalf of his or her firm.
(3) ANY CERTIFIED PUBLIC ACCOUNTANT WHO, WITHIN THE LAST TWO YEARS,
EITHER (I) HAS HAD ANY FINAL DISCIPLINARY ACTION TAKEN BY THE LICENSING
OR DISCIPLINARY AUTHORITY OF ANY OTHER STATE CONCERNING THE PRACTICE OF
PUBLIC ACCOUNTANCY THAT HAS RESULTED IN SOME SANCTION LESS THAN SUSPEN-
SION OR REVOCATION, OR (II) HAS HAD HIS OR HER LICENSE IN ANOTHER STATE
REINSTATED AFTER A SUSPENSION OR REVOCATION OF SAID LICENSE, MAY PRAC-
TICE PUBLIC ACCOUNTANCY IN THIS STATE UNDER PARAGRAPH A OF THIS SUBDIVI-
SION ONLY IF SUCH CERTIFIED PUBLIC ACCOUNTANT SUBMITS TO THE DEPARTMENT,
CONTEMPORANEOUSLY WITH COMMENCING PRACTICE IN THE STATE, NOTIFICATION OF
THE COMMENCEMENT OF PRACTICE AND THE DISCIPLINE PREVIOUSLY RECEIVED.
g. (1) Notwithstanding subparagraph two of paragraph a of this subdi-
vision or any other inconsistent law or rule to the contrary, a certi-
fied public accountant licensed by another state and in good standing
who [obtains a temporary] HAS A practice [permit] PRIVILEGE under this
section and files an application for licensure under section seventy-
four hundred four of this article [on or before the expiration date of
such temporary practice permit] may continue to practice under such
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[permit] PRIVILEGE for a period coterminous with the period during which
his or her application for licensure remains pending with the
department, INCLUDING ANY PERIOD AFTER THE CERTIFIED PUBLIC ACCOUNTANT
ESTABLISHES A PRINCIPAL PLACE OF BUSINESS IN NEW YORK WHILE HIS OR HER
APPLICATION IS PENDING.
(2) Nothing in this section shall limit the applicability of section
seventy-four hundred seven of this article.
[h. Fees. The fee for each limited permit and temporary practice
permit and each renewal shall be established in regulation by the board
of regents.]
S 3. Section 7406-a of the education law is REPEALED.
S 4. Subdivision 2 of section 7408 of the education law, as amended by
chapter 651 of the laws of 2008, is amended to read as follows:
2. No firm shall use the words "certified public accountant" or
"certified public accountants" or the letters "CPA" or "CPAs" in
connection with its name unless:
A. the sole proprietor of such firm or each partner of a partnership
or limited liability partnership, member of a limited liability company
or shareholder of a professional service corporation engaged within the
United States in the practice of public accountancy is in good standing
as a certified public accountant of one or more of the states of the
United States; OR
B. THE FIRM IS LICENSED IN SOME STATE, DOES NOT HAVE AN OFFICE IN THIS
STATE, AND DOES NOT PERFORM THE SERVICES DESCRIBED IN SUBDIVISIONS ONE
OR THREE OF SECTION SEVENTY-FOUR HUNDRED ONE-A OF THIS ARTICLE FOR A
CLIENT WHOSE HOME OFFICE IS IN THIS STATE.
S 5. Paragraph a of subdivision 3 of section 7408 of the education
law, as amended by chapter 651 of the laws of 2008, is amended to read
as follows:
a. Any firm WITH AN OFFICE IN THIS STATE that is established for the
business purpose of lawfully engaging in the practice of public accoun-
tancy pursuant to subdivisions one and two of section seventy-four
hundred one of this article or uses the title "CPA" or "CPA firm" or the
title "PA" or "PA firm" must register with the department. A firm of
certified public accountants or public accountants WITH AN OFFICE IN
THIS STATE engaged in the practice of public accountancy pursuant to
subdivision three of section seventy-four hundred one of this article,
but not engaged in the practice of public accountancy pursuant to subdi-
visions one and two of section seventy-four hundred one of this article,
may register with the department under this subdivision. ANY FIRM OF
CERTIFIED PUBLIC ACCOUNTANTS WITHOUT AN OFFICE IN THIS STATE THAT
ENGAGES IN THE SERVICES DESCRIBED IN PARAGRAPHS A, C, OR D OF SUBDIVI-
SION ONE OF SECTION SEVENTY-FOUR HUNDRED ONE-A OF THIS ARTICLE FOR A
CLIENT WITH ITS HOME OFFICE IN THIS STATE MUST REGISTER WITH THE DEPART-
MENT. ANY FIRM OF CERTIFIED PUBLIC ACCOUNTANTS WITHOUT AN OFFICE IN THIS
STATE THAT ENGAGES IN THE SERVICES DESCRIBED IN PARAGRAPH B OF SUBDIVI-
SION ONE, OR SUBDIVISION THREE, OF SECTION SEVENTY-FOUR HUNDRED ONE-A OF
THIS ARTICLE, FOR A CLIENT WITH A HOME OFFICE IN THIS STATE, MUST COMPLY
WITH SUBDIVISION TWO OF THIS SECTION AND SECTION SEVENTY-FOUR HUNDRED
TEN OF THIS ARTICLE AND PERFORM SUCH SERVICES THROUGH AN INDIVIDUAL WITH
PRACTICE PRIVILEGES UNDER SUBDIVISION TWO OF SECTION SEVENTY-FOUR
HUNDRED SIX OF THIS ARTICLE. ANY FIRM OF CERTIFIED PUBLIC ACCOUNTANTS
WITHOUT AN OFFICE IN THIS STATE THAT ENGAGES IN ANY SERVICE WITHIN THE
PRACTICE OF PUBLIC ACCOUNTANCY NOT DESCRIBED IN SUBDIVISIONS ONE OR
THREE OF SECTION SEVENTY-FOUR HUNDRED ONE-A OF THIS ARTICLE FOR A CLIENT
WITH A HOME OFFICE IN THIS STATE MUST PERFORM SUCH SERVICES THROUGH AN
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INDIVIDUAL WITH PRACTICE PRIVILEGES UNDER SUBDIVISION TWO OF SECTION
SEVENTY-FOUR HUNDRED SIX OF THIS ARTICLE AND BE AUTHORIZED TO PERFORM
SUCH SERVICES IN THE PRINCIPAL PLACE OF BUSINESS OF SUCH INDIVIDUAL. As
a condition of registration or renewal, the firm shall affirm that it
has not violated the provisions of this article, any other applicable
laws and such other requirements as the department may impose, consist-
ent with this article, except that the provisions of section seventy-
four hundred ten of this article shall not apply on initial registra-
tion.
S 6. Subparagraph 1 of paragraph b of subdivision 3 of section 7408 of
the education law, as amended by chapter 651 of the laws of 2008, is
amended to read as follows:
(1) At least one partner of a partnership or limited liability part-
nership, member of a limited liability company or shareholder of a
professional service corporation or the sole proprietor is licensed or
otherwise authorized to practice under this article and his or her
license to practice is not currently suspended, annulled or revoked in
any jurisdiction and he or she is regularly engaged in practice on
behalf of the firm within the state OR, IN THE CASE OF A FIRM WITHOUT AN
OFFICE IN THIS STATE REQUIRED TO REGISTER IN THIS STATE, AN INDIVIDUAL
WITH PRACTICE PRIVILEGES UNDER SUBDIVISION TWO OF SECTION SEVENTY-FOUR
HUNDRED SIX OF THIS ARTICLE;
S 7. Subdivision 3 of section 7408 of the education law is amended by
adding a new paragraph h to read as follows:
H. AN INDIVIDUAL LICENSEE OR INDIVIDUAL PRACTICING UNDER SUBDIVISION
TWO OF SECTION SEVENTY-FOUR HUNDRED SIX OF THIS ARTICLE WHO SIGNS OR
AUTHORIZES SOMEONE TO SIGN THE ACCOUNTANT'S REPORT ON THE FINANCIAL
STATEMENTS ON BEHALF OF A FIRM SHALL MEET THE COMPETENCY REQUIREMENTS
SET OUT IN THE PROFESSIONAL STANDARDS FOR SUCH SERVICES, AS RECOGNIZED
IN SUBDIVISION ONE OF SECTION SEVENTY-FOUR HUNDRED ONE-A OF THIS ARTI-
CLE.
S 8. This act shall take effect July 1, 2010.
