Bill Text: CT SB00341 | 2016 | General Assembly | Introduced

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Bill Title: An Act Modifying Prohibitions Against Contingent Fees And Commissions For Public Accountants And Requiring Online Renewal Of Licenses.

Spectrum: Committee Bill

Status: (Introduced - Dead) 2016-03-10 - Public Hearing 03/14 [SB00341 Detail]

Download: Connecticut-2016-SB00341-Introduced.html

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General Assembly		Raised Bill No. 341
February Session, 2016		LCO No. 2189
		*02189_______GAE*
Referred to Committee on GOVERNMENT ADMINISTRATION AND ELECTIONS
Introduced by:
(GAE)

AN ACT MODIFYING PROHIBITIONS AGAINST CONTINGENT FEES AND COMMISSIONS FOR PUBLIC ACCOUNTANTS AND REQUIRING ONLINE RENEWAL OF LICENSES.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 20-281l of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):

[(a) Except as expressly permitted by this section, a licensee shall not: (1) Pay a fee or commission to obtain a client; or (2) accept a fee or commission for referring a client to the products or services of a third party.

(b) A licensee, who is not performing any of the services set forth in subsection (c) of this section and who complies with the provisions of subsection (d) of this section, may accept a fee or commission for referring a client to the products or services of a third party if such referral is made in conjunction with professional services provided to the client by such licensee making such referral. Nothing in this subsection shall be construed to permit the solicitation or acceptance of a fee or commission solely for the referral of a client to a third party.]

[(c)] (a) A licensee shall not [perform services for] recommend or refer any product or service to a client for a commission and shall not accept a commission from a client during the period that the licensee is performing for such client any of the following services or during the period that is covered by any historical financial statements that are involved in any of the following services:

(1) An audit or review of a financial statement;

(2) [a] A compilation of a financial statement if the licensee expects or [has reasonable cause to] might reasonably expect that a third party will use the financial statement and the licensee's compilation report does not disclose a lack of independence; or

(3) [an] An examination of prospective financial information.

[(d)] (b) A licensee who is not prohibited under this section from performing services for a [fee or] commission or from accepting a [fee or] commission and who is paid or expects to be paid a [fee or] commission shall disclose such payment or expectation to any [client or other] person or entity to whom such licensee recommends or refers a product or service to which the [fee or] commission relates.

[(e) As used in this section, "fee" includes, but is not limited to, a commission, rebate, preference, discount or any other consideration.

(f) This section does not prohibit payments for the purchase of all, or a material part, of an accounting practice, or retirement payments to individuals who are or were formerly engaged in the practice of public accountancy, or payments to the heirs or estates of such individuals.

(g) Nothing in this section shall be construed to relieve a licensee from any requirement under federal or state law that obligates such licensee to obtain a license or authorization prior to referring a client to the products or services of a third party, including, but not limited to, any license requirements under federal or state securities or insurance laws.]

Sec. 2. Section 20-281m of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):

(a) A licensee shall not, during any period in which the licensee is engaged to perform any of the services listed in this subsection or during any period covered by any historical financial services involved in any of such services: (1) Perform for a contingent fee any of the following professional services, or accept a contingent fee from a client for whom the licensee or the licensee's firm performs any of the following services: (A) An audit or review of a financial statement; (B) a compilation of a financial statement if the licensee expects or has reasonable cause to expect that a third party will use the financial statement and the licensee's compilation report does not disclose a lack of independence; or (C) an examination of prospective financial information, or (2) prepare an original or amended tax return or claim for a tax refund for a contingent fee for any client.

(b) As used in this section, "contingent fee" means a fee established for the performance of a service that will not be charged unless a specified finding or result is attained or in which the amount of the fee is dependent on a specified finding or result of such service. "Contingent fee" does not include: (1) A fee fixed by courts or other [public] governmental authorities; (2) a fee in a tax matter that is based on the results of judicial proceedings or the findings of governmental agencies; or (3) a fee that varies based [solely] on the complexity of the services rendered.

[(c) A contingent fee arrangement between a licensee and a client shall be in writing and shall state the method by which the fee is determined.]

Sec. 3. Section 20-281d of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):

(a) The board shall issue or renew licenses to persons who make application and demonstrate their qualifications in accordance with subsections (b) to (g), inclusive, of this section.

(b) Licenses shall be initially issued for one year and renewed annually. Applications for such licenses shall be made in such form, and in the case of applications for renewal, between such dates, as the board shall by regulation, adopted in accordance with the provisions of chapter 54, specify.

(c) An applicant for initial issuance of a license under this section shall show:

(1) That [he] such applicant holds a valid certificate;

(2) If the applicant's certificate was issued more than four years prior to his or her application for issuance of an initial license under this section, that [he] the applicant has fulfilled the requirements of continuing professional education that would have been applicable under subsection (e) of this section if he or she had secured [his] an initial license within four years of issuance of his or her certificate and was now applying under subsection (e) of this section for renewal of such license.

(d) The board shall issue a certificate to a holder of a certificate issued by another state upon a showing that:

(1) The applicant passed the examination required for issuance of his or her certificate with grades that would have been passing grades at the time in this state; and

(2) The applicant meets all current requirements in this state for issuance of a certificate at the time the application is made; or the applicant, at the time of the issuance of the applicant's certificate in the other state, met all such requirements then applicable in this state; or the applicant has had five years of experience in the practice of public accountancy no earlier than the ten years immediately preceding the applicant's application or meets equivalent requirements prescribed by the board by regulation.

(e) For renewal of a license under this section, an applicant shall show that he or she has completed forty hours of continuing professional education during each year from the date of issuance or last renewal. The board may prescribe, by regulation adopted in accordance with the provisions of chapter 54, the content, duration and organization of continuing professional education courses which contribute to the general professional competence of the applicant.

(f) For renewal of a license under this section, the board shall charge the following fees for failure to earn continuing education credits by the June thirtieth deadline:

(1) Three hundred fifteen dollars for reporting on a renewal application a minimum of forty hours of continuing professional education, any of which was earned after June thirtieth and on or by September thirtieth;

(2) Six hundred twenty-five dollars for reporting on a renewal application a minimum of forty hours of continuing professional education any of which was earned after June thirtieth and on or by December thirty-first.

(g) The board shall charge a fee of one hundred fifty dollars for the initial issuance and the professional services fee for class I, as defined in section 33-182l, for each annual renewal of such license.

(h) Applicants for initial issuance or renewal of licenses under this section shall in their applications list all states in which they have applied for or hold certificates or licenses, and each holder of or applicant for a license under this section shall notify the board in writing, within thirty days after its occurrence, of any issuance, denial, revocation or suspension of a certificate or license by another state.

(i) The board shall administer an online renewal system for licenses renewed under this section. Each applicant for a license renewal under this section shall use such online renewal system and pay the applicable fee using a credit card or electronic transfer of funds from a bank or credit union account, except a licensee may request a waiver of the requirement to use such system due to extenuating circumstances and the board may allow the licensee to renew his or her license using a paper form.

This act shall take effect as follows and shall amend the following sections:
Section 1	October 1, 2016	20-281l
Sec. 2	October 1, 2016	20-281m
Sec. 3	October 1, 2016	20-281d

Statement of Purpose:

To modify provisions concerning the prohibitions against holders of a certificate, license or permit issued by the Board of Accountancy accepting commissions and contingent fees and to require licensees to renew their license to practice public accountancy online and to make technical changes.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]