S T A T E O F N E W Y O R K
________________________________________________________________________
2628--A
2011-2012 Regular Sessions
I N S E N A T E
January 27, 2011
___________
Introduced by Sens. LAVALLE, STAVISKY, DeFRANCISCO -- read twice and
ordered printed, and when printed to be committed to the Committee on
Higher Education -- reported favorably from said committee, ordered to
first and second report, ordered to a third reading, passed by Senate
and delivered to the Assembly, recalled, vote reconsidered, restored
to third reading, amended and ordered reprinted, retaining its place
in the order of third reading
AN ACT to amend the education law, in relation to the practice of public
accountancy by accountants who are not licensed in New York state; and
to repeal certain provisions of such law relating thereto
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 7406 of the education law, as amended by chapter
651 of the laws of 2008, is amended to read as follows:
S 7406. Limited permits and [temporary] practice [permits] PRIVILEGE.
1. Limited permits. On recommendation of the board, the department may
issue a limited permit to an applicant of good moral character, who is
the holder of a certificate, license or degree in a foreign country
constituting a recognized qualification for the performance in such
country of the acts set forth in section seventy-four hundred one of
this article, provided the applicant has professional qualifications
that are determined by the board to be significantly comparable to the
licensure requirements for certified public accountancy pursuant to this
article, and the applicant resides or has a place for the regular trans-
action of business within the state, and equal recognition is granted by
the foreign country concerned to certified public accountants or public
accountants licensed in the United States. Such limited permit shall be
valid for a period of two years and may be renewed on recommendation of
the board. Such permit shall authorize the applicant to use only the
title or designation under which he or she is generally known in his or
her own country, followed by the name of the country from which he or
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08393-05-1
S. 2628--A 2
she received his or her certificate, license or degree, notwithstanding
the provisions of subdivision two of section seventy-four hundred eight
of this article. THE FEE FOR EACH LIMITED PERMIT AND EACH RENEWAL SHALL
BE ESTABLISHED IN REGULATION BY THE BOARD OF REGENTS.
2. [Temporary practice permits] PRACTICE PRIVILEGE. a. [On recommenda-
tion of the board] EXCEPT AS OTHERWISE PROVIDED IN SUBPARAGRAPH TWO OR
THREE OF PARAGRAPH F OF THIS SUBDIVISION, a certified public accountant,
licensed by another state which the board of regents has determined to
have [significantly comparable] SUBSTANTIALLY EQUIVALENT certified
public accountant licensure requirements, or whose individual licensure
qualifications are verified by the department to be [significantly
comparable] SUBSTANTIALLY EQUIVALENT to New York's requirements, and in
good standing, who intends to perform ANY OF the services in [subdivi-
sions] SUBDIVISION one [and], two OR THREE of section seventy-four
hundred one of this article may [temporarily] practice public accountan-
cy in this state, if the certified public accountant:
(1) holds a valid license to practice public accountancy in the other
state, AND
(2) practices public accountancy in another state that is his or her
principal place of business[, and
(3) obtains from the department a temporary practice permit].
b. The [temporary] practice [permit] PRIVILEGE allows such certified
public accountant, who meets the requirements of paragraph a of this
subdivision to practice public accountancy in this state. [Each tempo-
rary practice permit shall allow the holder to practice in this state
for an aggregate total of one hundred eighty days during the twelve
month period beginning on the effective date of the permit.]
c. [Applications for the temporary practice permit shall be submitted
to the department through an electronic means as prescribed by the
commissioner. After the department renders a timely initial determi-
nation that the applicant has submitted the information necessary to
verify that the requirements of paragraph a of this subdivision are
satisfied, applications for temporary practice permits shall be proc-
essed by the department within thirty days. During such thirty day proc-
essing period, the applicant may practice; provided, however, that if
the application is denied the applicant shall cease the practice of
public accountancy in the state of New York.] AN INDIVIDUAL WHO HAS BEEN
GRANTED PRACTICE PRIVILEGES UNDER THIS SECTION WHO PERFORMS ANY OF THE
SERVICES IN SUBDIVISION ONE OR TWO OF SECTION SEVENTY-FOUR HUNDRED ONE
OF THIS ARTICLE MAY ONLY DO SO THROUGH A FIRM WHICH HAS OBTAINED A
REGISTRATION UNDER SECTION SEVENTY-FOUR HUNDRED EIGHT OF THIS ARTICLE.
SUCH AN INDIVIDUAL, AS WELL AS AN INDIVIDUAL WITH A NEW YORK LICENSE WHO
DOES NOT HAVE A PRINCIPAL PLACE OF BUSINESS IN NEW YORK, MAY PROVIDE
SERVICES IN SUBDIVISION THREE OF SECTION SEVENTY-FOUR HUNDRED ONE OF
THIS ARTICLE THROUGH A FIRM OF CERTIFIED PUBLIC ACCOUNTANTS THAT DOES
NOT HAVE A REGISTRATION IN THIS STATE BUT THAT HOLDS A VALID LICENSE,
REGISTRATION, OR PERMIT IN ANOTHER STATE.
d. Any certified public accountant who practices in this state pursu-
ant to this section, and any firm that employs such certified public
accountant to provide such services in New York, consents to all of the
following as a condition of the exercise of such [temporary] practice
privilege:
(1) to the personal and subject matter jurisdiction and disciplinary
authority of the board of regents AS IF THE PRACTICE PRIVILEGE IS A
LICENSE, AND AN INDIVIDUAL WITH A PRACTICE PRIVILEGE IS A LICENSEE;
S. 2628--A 3
(2) to comply with this article, the rules of the board of regents and
the regulations of the commissioner; and
(3) to the appointment of the secretary of state or other public offi-
cial acceptable to the department, in the certified public accountant's
state of licensure or the state in which the firm has its principal
place of business, as the certified public accountant or firm's agent
upon whom process may be served in any action or proceeding by the
department against such certified public accountant or firm.
e. [No more than one temporary practice permit may be issued to any
individual applicant provided that each permit may be renewed by the
department up to three times such that an individual shall practice for
no more than four years within a five year time period under the
provisions of this section. Such renewals may be granted upon receipt of
written notice from the permit holder, provided that the applicant
remains in good standing and in compliance with all applicable laws,
rules and regulations.] FOR PURPOSES OF THIS SUBDIVISION, THE BOARD OF
REGENTS MAY DETERMINE THAT NATIONALLY-RECOGNIZED CERTIFIED PUBLIC
ACCOUNTANT LICENSURE REQUIREMENTS ARE SUBSTANTIALLY EQUIVALENT TO NEW
YORK'S REQUIREMENTS, SUCH THAT AN INDIVIDUAL LICENSED IN A STATE DETER-
MINED TO HAVE LICENSURE REQUIREMENTS SUBSTANTIALLY EQUIVALENT TO THE
NATIONALLY-RECOGNIZED CPA LICENSURE REQUIREMENTS, OR AN INDIVIDUAL WHOSE
LICENSURE QUALIFICATIONS ARE DETERMINED TO BE SUBSTANTIALLY EQUIVALENT
TO THE NATIONALLY-RECOGNIZED CPA LICENSURE REQUIREMENTS, MAY PRACTICE
UNDER THE PRACTICE PRIVILEGE PURSUANT TO THE REQUIREMENTS CONTAINED IN
THIS SUBDIVISION.
f. (1) A person who wishes to practice public accountancy in this
state but does not meet the requirements of paragraph a of this subdivi-
sion is subject to the full licensing and registration requirements of
this article.
(2) In the event the license from the other state of the certified
public accountant's principal place of business is no longer valid or in
good standing, or that the certified public accountant has had any final
disciplinary action taken [against his or her license] by the licensing
or disciplinary authority of any other state concerning the practice of
public accountancy THAT HAS RESULTED IN (I) THE SUSPENSION OR REVOCATION
OF HIS OR HER LICENSE, OR (II) OTHER DISCIPLINARY ACTION AGAINST HIS OR
HER LICENSE THAT ARISES FROM (A) GROSS NEGLIGENCE, RECKLESSNESS OR
INTENTIONAL WRONGDOING RELATING TO THE PRACTICE OF PUBLIC ACCOUNTANCY,
(B) FRAUD OR MISAPPROPRIATION OF FUNDS RELATING TO THE PRACTICE OF
PUBLIC ACCOUNTANCY, OR (C) PREPARATION, PUBLICATION, OR DISSEMINATION OF
FALSE, FRAUDULENT, OR MATERIALLY INCOMPLETE OR MISLEADING FINANCIAL
STATEMENTS, REPORTS OR INFORMATION RELATING TO THE PRACTICE OF PUBLIC
ACCOUNTANCY, the certified public accountant shall cease offering to
perform or performing such services in this state individually and on
behalf of his or her firm, UNTIL AND UNLESS SUCH CERTIFIED PUBLIC
ACCOUNTANT RECEIVES WRITTEN PERMISSION FROM THE DEPARTMENT TO RESUME THE
PRACTICE OF PUBLIC ACCOUNTANCY IN THIS STATE PURSUANT TO SUBPARAGRAPH
THREE OF THIS PARAGRAPH.
(3) ANY CERTIFIED PUBLIC ACCOUNTANT WHO, WITHIN THE LAST SEVEN YEARS,
IMMEDIATELY PRECEDING THE DATE ON WHICH HE OR SHE WISHES TO PRACTICE IN
NEW YORK, (I) HAS BEEN THE SUBJECT OF ANY FINAL DISCIPLINARY ACTION
TAKEN AGAINST HIM OR HER BY THE LICENSING OR DISCIPLINARY AUTHORITY OF
ANY OTHER JURISDICTION WITH RESPECT TO ANY PROFESSIONAL LICENSE OR HAS
ANY CHARGES OF PROFESSIONAL MISCONDUCT PENDING AGAINST HIM OR HER IN ANY
OTHER JURISDICTION, OR (II) HAS HAD HIS OR HER LICENSE IN ANOTHER JURIS-
DICTION REINSTATED AFTER A SUSPENSION OR REVOCATION OF SAID LICENSE, OR
S. 2628--A 4
(III) HAS BEEN DENIED ISSUANCE OR RENEWAL OF A PROFESSIONAL LICENSE OR
CERTIFICATE IN ANY OTHER JURISDICTION FOR ANY REASON OTHER THAN AN INAD-
VERTENT ADMINISTRATIVE ERROR, OR (IV) HAS BEEN CONVICTED OF A CRIME OR
IS SUBJECT TO PENDING CRIMINAL CHARGES IN ANY JURISDICTION, SHALL SO
NOTIFY THE DEPARTMENT, ON A FORM PRESCRIBED BY THE DEPARTMENT, AND SHALL
NOT PRACTICE PUBLIC ACCOUNTANCY IN THIS STATE UNDER PARAGRAPH A OF THIS
SUBDIVISION UNTIL HE OR SHE HAS RECEIVED FROM THE DEPARTMENT WRITTEN
PERMISSION TO DO SO. IN DETERMINING WHETHER THE CERTIFIED PUBLIC
ACCOUNTANT SHALL BE ALLOWED TO PRACTICE IN THIS STATE, THE DEPARTMENT
SHALL FOLLOW THE PROCEDURE TO DETERMINE WHETHER AN APPLICANT FOR LICEN-
SURE IS OF GOOD MORAL CHARACTER. ANYONE FAILING TO PROVIDE THE NOTICE
REQUIRED BY THIS PARAGRAPH SHALL BE SUBJECT TO THE PERSONAL AND SUBJECT
MATTER JURISDICTION AND DISCIPLINARY AUTHORITY OF THE BOARD OF REGENTS
AS IF THE PRACTICE PRIVILEGE IS A LICENSE, AND AN INDIVIDUAL WITH A
PRACTICE PRIVILEGE IS A LICENSEE, AND MAY BE DEEMED TO BE PRACTICING IN
VIOLATION OF SECTION SIXTY-FIVE HUNDRED TWELVE OF THIS TITLE.
g. (1) Notwithstanding subparagraph two of paragraph a of this subdi-
vision or any other inconsistent law or rule to the contrary, a certi-
fied public accountant licensed by another state and in good standing
who [obtains a temporary] OTHERWISE MEETS THE practice [permit] PRIVI-
LEGE REQUIREMENTS under this section and files an application for licen-
sure under section seventy-four hundred four of this article [on or
before the expiration date of such temporary practice permit] may
continue to practice under such [permit] PRIVILEGE for a period cotermi-
nous with the period during which his or her application for licensure
remains pending with the department, INCLUDING ANY PERIOD AFTER THE
CERTIFIED PUBLIC ACCOUNTANT ESTABLISHES A PRINCIPAL PLACE OF BUSINESS IN
NEW YORK WHILE HIS OR HER APPLICATION IS PENDING.
(2) Nothing in this section shall limit the applicability of section
seventy-four hundred seven of this article.
[h. Fees. The fee for each limited permit and temporary practice
permit and each renewal shall be established in regulation by the board
of regents.]
S 2. Section 7406-a of the education law is REPEALED.
S 3. Subparagraph 1 of paragraph b of subdivision 3 of section 7408 of
the education law, as amended by chapter 651 of the laws of 2008, is
amended to read as follows:
(1) At least one partner of a partnership or limited liability part-
nership, member of a limited liability company or shareholder of a
professional service corporation or the sole proprietor is licensed or
otherwise authorized to practice under this article and his or her
license to practice is not currently suspended, annulled or revoked in
any jurisdiction and he or she is regularly engaged in practice on
behalf of the firm within the state OR, IN THE CASE OF A FIRM THAT HOLDS
A LICENSE, REGISTRATION, OR PERMIT AS A FIRM OF CERTIFIED PUBLIC
ACCOUNTANTS IN ANOTHER STATE AND IS REQUIRED TO REGISTER IN THIS STATE,
AN INDIVIDUAL WITH PRACTICE PRIVILEGES UNDER SUBDIVISION TWO OF SECTION
SEVENTY-FOUR HUNDRED SIX OF THIS ARTICLE;
S 4. Subdivision 3 of section 7408 of the education law is amended by
adding a new paragraph h to read as follows:
H. AN INDIVIDUAL LICENSEE OR INDIVIDUAL PRACTICING UNDER SUBDIVISION
TWO OF SECTION SEVENTY-FOUR HUNDRED SIX OF THIS ARTICLE WHO SIGNS OR
AUTHORIZES SOMEONE TO SIGN THE ACCOUNTANT'S REPORT ON THE FINANCIAL
STATEMENTS ON BEHALF OF A FIRM SHALL MEET THE COMPETENCY REQUIREMENTS
SET OUT IN THE PROFESSIONAL STANDARDS FOR SUCH SERVICES, AS RECOGNIZED
S. 2628--A 5
IN SUBDIVISION ONE OF SECTION SEVENTY-FOUR HUNDRED ONE-A OF THIS ARTI-
CLE, AND AS SET OUT IN THE RULES OF THE BOARD OF REGENTS.
S 5. This act shall take effect on the ninetieth day after it shall
have become a law.
