Chapter 322 Oregon Laws 1999

Session Law

AN ACT

SB 1049

Relating to professional accountancy; creating new provisions; amending ORS 297.680, 297.740, 305.230, 309.100, 407.185, 410.480, 461.230, 670.306, 673.010, 673.040, 673.050, 673.060, 673.075, 673.100, 673.138, 673.150, 673.160, 673.165, 673.170, 673.185, 673.210, 673.220, 673.320, 673.325, 673.350, 673.360, 673.370, 673.380, 673.390, 673.400, 673.410, 673.415, 673.440, 673.455, 673.610 and 673.990 and section 4, chapter 310, Oregon Laws 1999 (Enrolled Senate Bill 152); repealing ORS 673.020, 673.030, 673.080, 673.090, 673.095, 673.130, 673.132, 673.134, 673.136, 673.140, 673.180, 673.330 and 673.340 and section 1, chapter 310, Oregon Laws 1999 (Enrolled Senate Bill 152), sections 1 and 2, chapter 415, Oregon Laws 1999 (Enrolled Senate Bill 154), and sections 1 and 2, chapter 405, Oregon Laws 1999 (Enrolled Senate Bill 155); and declaring an emergency.

Be It Enacted by the People of the State of Oregon:

SECTION 1. The public interest requires:

(1) The promotion of reliable information used for guidance in financial transactions and accounting for, or assessing the financial status or performance of, commercial, noncommercial and governmental enterprises;

(2) That persons professing special competence in accountancy or offering assurance as to the reliability or fairness of presentation of such information demonstrate their qualifications to do so, and that persons who have not demonstrated and maintained such qualifications, including public accountancy professionals not in public practice, not be permitted to hold themselves out as having special competence or to offer such assurance; and

(3) That the conduct of persons licensed as having special competence in accountancy be regulated in all aspects of their professional work and that the use of titles relating to the practice of public accountancy that have the capacity or tendency to mislead or deceive the public as to the status or competence of the persons using the titles be prohibited.

SECTION 2. ORS 673.010 is amended to read:

673.010. As used in ORS 673.010 to 673.455:

(1) "Attest," "attesting" or "attestation" means the opinion of a licensee as to the reliability or fairness of information that is used for guidance in the financial transactions of, accounting for or assessing the status or performance of, commercial and noncommercial enterprises, whether public or private, following the completion of an audit, in accordance with generally accepted accounting and auditing standards. The board by rule shall further define what constitutes attestation services in conformance, to the extent possible, with professional standards, including but not limited to the Statements on Auditing Standards (SAS) for audits or other engagements, the Statement of Standards for Accounting and Review Services (SSARS) for the review or compilation of financial statements and the Statements on Standards for Attestation Engagements (SSAE) for examinations of prospective financial information.

[(1)] (2) "Board" means the [State] Oregon Board of Accountancy created by ORS 673.410.

[(2)] (3) "[Other] Business [form] organization" means any form of business organization authorized by law, including but not limited to [that is not] a proprietorship, partnership, corporation, limited liability company, limited liability partnership or professional corporation.

[(3) "Public accountant" means a person licensed in this state as a public accountant.]

(4) "Certificate" means a certificate of certified public accountant issued under ORS 673.040.

(5) "Client" means a person who agrees with a licensee to receive any professional service from the licensee.

(6) "Contingent fee" means a fee established for the performance of any professional service and directly or indirectly paid to a licensee pursuant to an arrangement in which no fee will be charged unless a specified finding or result is attained, or in which the amount of the fee is otherwise dependent upon the finding or result of such service. A fee is not contingent if the fee:

(a) Is fixed by courts or other public authorities; or

(b) In tax matters, is determined based on the results of judicial proceedings or the findings of governmental agencies.

(7) "License" means:

(a) A certificate, permit or registration, or a license issued under ORS 673.100, enabling the holder thereof to practice public accountancy in this state; or

(b) A certificate, permit, registration or other authorization issued by a jurisdiction outside this state enabling the holder thereof to practice public accountancy in that jurisdiction.

(8) "Licensee" means the holder of a license under subsection (7)(a) of this section.

(9) "Manager" means a manager of a limited liability company.

(10) "Member" means a member of a limited liability company.

(11) "Peer review" means a study, appraisal or review of one or more aspects of the public accountancy work of a registered business organization that performs attestation services by a person or persons permitted under ORS 673.150 to practice public accountancy and independent of the registered business organization being reviewed.

(12) "Permit" means a permit to practice public accountancy issued under ORS 673.150.

(13) "Professional" means arising out of or related to the specialized knowledge or skills associated with certified public accountants and public accountants.

(14) "Public accountant" means a public accountant licensed under ORS 673.100.

(15) "Registration" means the authority issued under ORS 673.160 by the Oregon Board of Accountancy to a business organization to practice public accountancy.

(16) "Report," when used with reference to attestation services, means an opinion or other form of written language that states or implies assurance as to the reliability of any financial statements and that also includes or is accompanied by any statement or implication that the person issuing the report has special knowledge or competence in public accountancy. Such a statement or implication of special knowledge or competence may arise from use by the issuer of the report of names or titles indicating that the issuer is a public accountancy professional or organization or may arise from the language of the report itself.

(a) "Report" includes any form of written language that:

(A) Disclaims an opinion when the form of language implies any positive assurance as to the reliability of the financial statements referred to or special knowledge or competence on the part of the person issuing the language;

(B) Implies any positive assurance as to the reliability of the financial statements referred to or special knowledge or competence on the part of the person issuing the language; or

(C) Relates to the financial affairs of a person and that is conventionally used by licensees in reports or financial statements.

(b) "Report" does not include:

(A) The following statement signed by a person who does not hold a certificate, license or permit under ORS 673.010 to 673.455 as long as the statement is not accompanied by any wording indicating the person is an accountant or auditor or any other language prohibited by ORS 673.310 or 673.320:

___________________________________________________________________

"The accompanying balance sheet (or ___) of XYZ Company as of (date), and the related statements of income (or retained earnings or cash flow) for the year then ended have been prepared by me (us).

"The information presented in these financial statements is the representation of management (owners)."

___________________________________________________________________

(B) Any other financial statements or reports that are not and do not purport to be in compliance with national standards, including but not limited to Statements of Standards for Accounting and Review Services (SSARS) and Statements on Standards for Attestation Engagements (SSAE) adopted by the board by rule, when the statements or reports are issued by persons not otherwise subject to regulation by the board under ORS 673.010 to 673.455.

[(4)] (17) "State" means any state, territory or insular possession of the United States, and the District of Columbia.

(18) "Substantial equivalency" means a determination by the board or its designee that:

(a) The education, examination and experience requirements contained in the statutes and administrative rules of another jurisdiction are equivalent to or exceed the education, examination and experience requirements contained in ORS 673.040, 673.050 and 673.060 and rules of the board issued thereunder; or

(b) An individual's education, examination and experience qualifications are equivalent to or exceed the education, examination and experience requirements contained in ORS 673.040, 673.050 and 673.060 and rules of the board issued thereunder.

SECTION 3. ORS 673.040 is amended to read:

673.040. [(1) The certificate of certified public accountant shall be granted by the State Board of Accountancy to any person who meets the requirements of ORS 673.050 and 673.060.]

[(2) Any person who has received from the board a certificate of "certified public accountant" and who holds a permit issued under ORS 673.150 shall be styled and known as a "certified public accountant" and may also use the abbreviation of "C.P.A." The board shall keep a list of certified public accountants. Any certified public accountant may also be known as a "public accountant."]

(1) A certificate of certified public accountant shall be granted to any applicant who meets the requirements of this section and ORS 673.050 and 673.060 and who passes an examination on the code of professional ethics adopted by the Oregon Board of Accountancy.

(2) An applicant for a certificate shall show that after meeting the eligibility requirements for the examination required by ORS 673.050, the applicant has had one year of experience, meeting requirements prescribed by the board by rule, under the direct supervision of a public accountant or of a certified public accountant who is licensed and in good standing in this state or another jurisdiction.

(3) The board may issue a certificate to a holder in good standing of a license of certified public accountant issued by another state or by a foreign country upon a showing that the holder meets requirements that are substantially equivalent to the education, experience and other requirements that must be satisfied for the issuance of a certificate of certified public accountant under ORS 673.010 to 673.455.

(4) The board shall charge a fee for each application for issuance of a certificate under this section in an amount prescribed by the board by rule.

(5) The board by rule shall prescribe:

(a) Information required of applicants regarding the practice of public accountancy outside this state; and

(b) Information required of licensees regarding changes in the ability or authority of the licensee to practice public accountancy.

(6) Any certified public accountant may also be known as a "public accountant."

SECTION 4. Notwithstanding ORS 673.040 (2), the Oregon Board of Accountancy shall issue a certificate to any person who meets the requirements in ORS 673.050 (1997 Edition) for the examination, applies for the examination before January 1, 2000, and passes the examination, if the person has had two years of experience, meeting requirements prescribed by the board by rule, under the direct supervision of a public accountant or of a certified public accountant who is licensed and in good standing in this state or another jurisdiction.

SECTION 5. ORS 673.050 is amended to read:

673.050. [An applicant] A candidate for admission to the examination for a certified public accountant certificate shall comply with any one of the following:

(1) Present satisfactory evidence of graduation from a college or university recognized by the [State] Oregon Board of Accountancy, and shall have completed 30 or more semester hours or 45 or more quarter hours or the equivalent thereof in the study of accounting, business law, economics and finance, of which no less than 20 semester hours or 30 quarter hours or the equivalent thereof shall be in the study of accounting; or

(2) Be a public accountant; or

(3) Present satisfactory evidence of graduation from a high school with a four-year course or of having acquired an equivalent education, and shall have had two years of public [accounting] accountancy experience or the equivalent satisfactory to the board.

SECTION 6. ORS 673.050, as amended by section 1, chapter 640, Oregon Laws 1997, is amended to read:

673.050. (1) Except as provided in subsection (2) of this section, [an applicant] a candidate for admission to the examination for a certified public accountant certificate shall:

(a) Present satisfactory evidence of graduation with a baccalaureate or higher degree from a college or university that is accredited by one of the six regional accrediting associations or by another accrediting body that is recognized by the [State] Oregon Board of Accountancy, and shall have completed 150 or more semester hours or 225 or more quarter hours or the equivalent thereof, including courses in the study of accounting, business, economics, finance, written and oral communications and other subjects as determined by the board as appropriate for the [accounting] accountancy profession; or

(b) Be a public accountant who received a license under ORS 673.100 prior to January 1, 2000.

(2) A person may apply to take those parts of the examination for the certificate of certified public accountant described in ORS 673.100 on which passing grades must be received before a license as a public accountant may be issued if the person presents satisfactory evidence of graduation from a high school with a four-year course or of having acquired an equivalent education, and has had two years of public [accounting] accountancy experience or the equivalent satisfactory to the board.

SECTION 7. Nothing in the amendments to ORS 673.050 by section 5 or 6 of this 1999 Act affects the applicability date provisions of section 2, chapter 640, Oregon Laws 1997.

SECTION 8. ORS 673.060 is amended to read:

673.060. [(1) An applicant for a certificate of certified public accountant shall have successfully passed written examinations in knowledge of accounting, auditing and such other related subjects as the State Board of Accountancy determines to be appropriate, and an applicant shall either:]

[(a) Have had two years' public accounting experience or the equivalent thereof satisfactory to the board under its rules; or]

[(b) Have had one year of public accounting experience or the equivalent thereof satisfactory to the board under its rules and have completed one year of college or university courses in accounting or related subjects beyond the baccalaureate degree or the equivalent thereof satisfactory to the board under its rules.]

[(2) An applicant for a certificate of certified public accountant must make application on a form provided by the board. The board shall charge each applicant a fee for application not to exceed $100, as determined by the board.]

[(3) Examinations provided for in this section shall be held by the board and shall take place as often as may be necessary in the opinion of the board, but not less frequently than semiannually. The board may contract with any organization, governmental or private, for examination material and services. The board may also enter an agreement with the licensing authority of any other state for examination services such as monitoring examinations of applicants temporarily absent from this state. All examination papers shall be preserved for a period of at least three months after the notification of grading. Any failed candidate, upon written request to the board, shall have access to the candidate's papers. The board may prescribe a fee not to exceed $400 for the inspection of examination papers.]

[(4) The board by rule may prescribe the terms and conditions under which a candidate who successfully completes an examination in at least two subjects shall have the right to be reexamined in the remaining subjects only, at subsequent examinations held by the board. If the candidate passes in the remaining subjects within a period of time specified in the rules of the board, the candidate shall be considered to have passed the examination.]

[(5) The board shall charge each candidate a fee not to exceed $150, as determined by the board for each examination provided for in ORS 673.010 to 673.455, which shall be payable by the applicant at the time of making application. When an applicant has passed in two or more subjects, reexamination of the remaining subjects shall be given the same applicant for a fee not to exceed $50 as determined by the board for each subject.]

(1) The examination required to be passed as a condition for the granting of a certificate of certified public accountant shall be held by the Oregon Board of Accountancy and shall test the candidate's knowledge of the subjects of accounting and auditing and such other related subjects as the board may specify by rule. The time for holding the examination shall be fixed by the board and may be changed from time to time. The examination shall be held not less than twice a year. The board may contract with any organization, governmental or private, for examination material and services. The board may also enter into an agreement with the licensing authority of any other jurisdiction or with the National Association of State Boards of Accountancy for examination services such as monitoring examinations of candidates.

(2) A candidate shall be required to pass all sections of the examination in order to qualify for a certificate of certified public accountant and must pass the sections of the examination described in ORS 673.100 (1)(c) to qualify for a license as a public accountant.

(3) The board may charge, or provide for a third party administering the examination to charge, each applicant or candidate a fee determined by the board by rule for the examination or reexamination described in this section. The fee shall be payable by the applicant or candidate at the time of application.

SECTION 8a. If Senate Bill 152 becomes law, section 1, chapter 310, Oregon Laws 1999 (Enrolled Senate Bill 152) (amending ORS 673.060), is repealed.

SECTION 8b. If Senate Bill 152 becomes law, section 4, chapter 310, Oregon Laws 1999 (Enrolled Senate Bill 152), is amended to read:

Sec. 4. The amendments to ORS [673.060,] 673.075 and 673.100 by sections [1 to 3 of this 1999 Act] 2 and 3, chapter 310, Oregon Laws 1999 (Enrolled Senate Bill 152), apply to examinations held on or after the effective date of [this 1999 Act] chapter 310, Oregon Laws 1999 (Enrolled Senate Bill 152).

SECTION 9. ORS 673.100 is amended to read:

673.100. (1) The [State] Oregon Board of Accountancy shall issue a license as a public accountant to a person who applies for the license and who:

(a) Passes [a written] an examination on the code of professional ethics adopted by the board;

(b) Meets the requirements of ORS 673.050 for admission to the examination for the certificate of certified public accountant;

(c) Takes the examination for the certificate of certified public accountant pursuant to ORS 673.060 and receives passing grades in the two parts of the examination that include auditing and knowledge of accounting; and

(d) Has one year of public [accounting] accountancy experience, including auditing, or the equivalent satisfactory to the board.

(2) An applicant for a license as a public accountant must make application on a form provided by the board. The board shall charge each applicant a fee for application in an amount [not to exceed $100, as] determined by the board by rule.

SECTION 10. ORS 673.138 is amended to read:

673.138. Notwithstanding any other law, the liability and limitations on liability of a shareholder, owner, member or comparable person in [an other business form organized to provide accounting services,] a registered business organization that is not a proprietorship or partnership for negligent or wrongful acts, omissions or misconduct in the rendering of professional [accounting] accountancy services on behalf of the [other business form] registered business organization, shall be as set forth in ORS chapter 58, regarding the liability of a shareholder of a professional corporation for such negligence or wrongful acts, omissions or misconduct.

SECTION 11. ORS 673.150 is amended to read:

673.150. (1) Permits to engage in the practice of public [accounting] accountancy in this state shall be issued by the [State] Oregon Board of Accountancy biennially to applicants who are:

(a) Holders of the certificate of certified public accountant issued under ORS 673.040 to 673.080; [and to public accountants.]

(b) Holders of a license as defined in ORS 673.010 (7)(b) issued by another jurisdiction, if the license requirements meet the education, examination and experience requirements established by the board by rule as substantially equivalent to the requirements for a certificate under ORS 673.040, 673.050, 673.060 and 673.075; or

(c) Public accountants licensed under ORS 673.100.

(2) The board by rule shall cause all permits issued under this section to be renewed biennially. [When a permit is issued for the first time, the board shall require the permit holder to renew the permit only when a full permit period has elapsed.]

(3) Applications for permits or for renewals of permits may be submitted to the board on a form prescribed by the board [at any time prior to the commencement of the license period] within such time periods as the board prescribes by rule. Applications for permits or for renewals of permits shall be accompanied by a fee [of not more than $100 as] determined by the board by rule.

(4) Applications for renewals of permits shall be accompanied by evidence satisfactory to the board that the applicant has complied with continuing education requirements under ORS 673.165 unless those requirements have been waived by the board.

[(5) Applications for renewals of permits shall be accompanied by evidence satisfactory to the board that the applicant, either individually or as an employee or a member of a partnership registered under ORS 673.090 or 673.130, has complied with the quality review requirements described in ORS 673.455.]

[(6)] (5) A permit that is not renewed by the close of the permit period may be restored upon payment to the board of a delinquent renewal fee[, not to exceed $50, as] in an amount determined by the board by rule. Any permit that is not renewed within 60 days after the close of the permit period for which it was issued or renewed shall lapse. The board may restore a lapsed permit upon payment to it of all past unpaid renewal fees and the delinquent renewal fee. However, the board may restore a permit issued or renewed for a permit period that ended more than five years prior to the date of the application for restoration only upon demonstration satisfactory to the board that the applicant is qualified to engage in the practice of public [accounting] accountancy.

[(7)] (6) Notwithstanding subsection (3) of this section, the board may by rule prescribe a reduced fee for renewal of permits of those certified public accountants and public accountants who have reached the age of 65 years.

SECTION 12. ORS 673.160 is amended to read:

673.160. [(1) As provided in ORS 58.345, the State Board of Accountancy may require professional corporations of certified public accountants or professional corporations of public accountants to register with the board.]

[(2) The board by rule may require that other business forms of certified public accountants and other business forms of public accountants register with the board. The board may establish a registration and renewal fee, with the approval of the Oregon Department of Administrative Services.]

(1) Business organizations of certified public accountants or of public accountants shall register with the Oregon Board of Accountancy if the business organization:

(a) Uses the terms "certified public accountants" or "public accountants" or abbreviations for such terms;

(b) Holds itself out to clients or the public as a business organization engaged in the practice of public accountancy; or

(c) Performs attestation services.

(2) Nothing in this section shall be construed to require a holder of a permit under ORS 673.150 to register under this section unless the permit holder:

(a) Holds the permit holder out to clients or the public as a business organization composed of more than one licensee; or

(b) Performs attestation services.

(3) Registrations shall be issued and renewed for periods of not more than two years. Applications for registration shall be made in a form prescribed by the board by rule. Applications for renewal shall be made between the dates prescribed by the board by rule.

(4) The following requirements must be satisfied before a registration may be issued or renewed under this section:

(a) Notwithstanding any other provision of law, a simple majority of the ownership of the business organization, in terms of financial interests and voting rights of all partners, officers, shareholders, members or managers, shall belong to holders of permits or holders of certificates who are licensed in any state, and the partners, officers, shareholders, members or managers of the business organization whose principal place of business is in this state and who perform public accountancy services in this state, shall be holders of permits under ORS 673.150. If a majority of the ownership of the business organization is held by holders of permits who are public accountants holding licenses issued under ORS 673.100, the business organization may not use the name "CPA Firm" or any similar name indicating that a majority of the ownership of the firm holds certificates issued under ORS 673.040;

(b) In the case of a business organization that includes owners who are not holders of permits under ORS 673.150, a holder of a permit in this state shall be responsible for the management and proper registration of the business organization;

(c) All owners of the business organization who are not holders of permits under ORS 673.150 shall be active individual participants in the business organization or affiliated entities; and

(d) Any person who is responsible for supervising attestation services and who signs or authorizes someone to sign the accountant's report on the financial statements on behalf of the business organization in this state, shall hold a permit under ORS 673.150 and meet the competency requirements established by the board by rule.

(5) An application for registration or renewal of registration under this section shall:

(a) List all states in which the business organization has applied for or holds permits to practice public accountancy; and

(b) Provide evidence that the requirements of subsection (4) of this section are satisfied.

(6) Each applicant for registration or renewal under this section and each registrant shall notify the board in writing, within the time period specified by the board by rule, of:

(a) The identities of partners, officers, shareholders, members, managers or owners of the business organization who work regularly in this state;

(b) The number or location of offices in this state;

(c) The identity of the persons in charge of the offices;

(d) Any issuance, denial, revocation, lapse or suspension of authority to perform professional or other services in any jurisdiction against a partner, officer, shareholder, member, manager or owner of the applicant or registrant; and

(e) The filing of a lawsuit relating to professional services of the business organization, the commencement of any civil action an essential element of which involves fraud, dishonesty or misrepresentation, or of any criminal action against the applicant or registrant or against a partner, officer, shareholder, member, manager or owner of the applicant or registrant.

(7) The board shall charge a fee for each application for issuance or renewal of registration under this section in an amount prescribed by the board by rule.

(8) Applicants for renewals of registrations under this section shall undergo a peer review as provided under ORS 673.455, unless the registrant notifies the board that the registrant is exempt from peer review requirements because the registrant does not perform attestation services.

SECTION 13. ORS 673.165 is amended to read:

673.165. (1) Each holder of a permit issued under ORS 673.150, under rules adopted by the [State] Oregon Board of Accountancy, shall participate in a continuing education program that directly contributes to professional competency.

(2) The education programs shall include any of the following:

(a) Professional development programs and technical meetings of professional associations of public accountants [and], of certified public accountants or of public accountants and certified public accountants.

(b) University and college courses.

(c) Such professional staff training programs provided by [accounting firms] accountancy organizations and other education programs [as have been approved by the board under its rules] that meet the requirements established by the board by rule.

(3) The board shall determine the hourly value to be assigned to each education program.

(4) The number of hours of continuing education required shall be determined by the board, but shall not exceed 40 hours per year, or the equivalent, for both certified public accountants and public accountants.

(5) The board by rule may adopt conditions under which continuing education requirements may be waived. However, continuing education requirements may not be waived by the board for more than three consecutive years except for military service, retirement, disability, absence from the state or for other instances of individual hardship as determined by the board, or for accountants granted inactive status by the board. The board may, among other things, take into account the accessibility by applicants to continuing education programs and any impediments to interstate practice of public accountancy that may result from differences in continuing education requirements in other states.

SECTION 14. ORS 673.170 is amended to read:

673.170. (1) The [State] Oregon Board of Accountancy may take any of the following disciplinary actions:

(a) Revoke, suspend or refuse to issue any certificate [described in] issued under ORS 673.040 to 673.080.

(b) Revoke, suspend or refuse to issue any public accountant's license [or any registration described in ORS 58.345, 673.090, 673.130 or 673.160 (2)] issued under ORS 673.100.

(c) Revoke, suspend, refuse to renew or refuse to issue any permit described in ORS 673.150.

(d) Censure the holder of any permit described in ORS 673.150.

(e) Revoke, suspend, refuse to renew or refuse to issue any registration issued under ORS 673.160.

(f) Censure the holder of any registration issued under ORS 673.160.

(2) The board may take any of the actions described in subsection (1) of this section for any one or any combination of the following causes:

(a) Fraud or deceit in obtaining or applying for:

(A) A certificate under ORS 673.040 to 673.080;

(B) A public accountant's license under ORS 673.100;

(C) A registration under ORS 58.345[, 673.090, 673.130 or 673.160 (2)] or 673.160;

(D) A permit under ORS 673.150; or

(E) Admission to the roster of authorized accountants referred to in ORS 297.670.

(b) Dishonesty, fraud or gross negligence in the practice of public [accounting] accountancy.

(c) Incompetence in the practice of public [accounting] accountancy. A [licensee, certificate holder or permit] holder of a license issued under ORS 673.100, certificate, permit or registration is incompetent in the practice of public [accounting] accountancy if the [person] holder:

(A) Engages or has engaged in conduct that evidences a lack of ability or fitness to discharge the duty owed [by the person] to a client or the general public; or

(B) Engages or has engaged in conduct that evidences a lack of knowledge or ability to apply principles or skills of the practice of public [accounting] accountancy, as adopted by the board.

(d) Violation of any of the provisions of ORS [673.020, 673.030, or 673.310 to 673.350] 673.010 to 673.455.

(e) Violation of any of the provisions of ORS 297.405 to 297.555.

(f) Violation of any provision of the Code of Professional Conduct adopted by the board under the authority granted by ORS 673.010 to 673.455, or rules adopted by the board under ORS 670.310.

(g) Conduct resulting in a conviction of a felony under the laws of any state, of any foreign jurisdiction or of the United States. However, such conduct may be considered only to the extent permissible under the provisions of ORS 670.280.

(h) Conviction of any crime, an essential element of which is dishonesty, [or] fraud or misrepresentation, under the laws of any state, of any foreign jurisdiction or of the United States.

(i) Conviction of willful failure to pay any tax, file any tax return, keep records or supply information required under the tax laws of any state, of any foreign jurisdiction or of the United States, or conviction of the willful making, rendering, delivery, disclosure, signing or verifying of any false or fraudulent list, return, account, statement or other document, or of supplying any false or fraudulent information, required under the tax laws of any state, of any foreign jurisdiction or of the United States.

(j) Cancellation, revocation, suspension or refusal to renew, authority to practice as a certified public accountant or a public accountant in any state or foreign jurisdiction.

(k) Cancellation, suspension, revocation or refusal to renew by any state, any foreign jurisdiction or any federal agency of the right to practice law, to practice as an enrolled agent before the Internal Revenue Service pursuant to 31 C.F.R. part 10, or to practice under other regulatory law if the cancellation, suspension, revocation or refusal to renew was related to the practice of public [accounting] accountancy or if dishonesty, fraud or deception was involved.

(L) Failure to comply with the continuing education requirements under ORS 673.165 unless such requirements have been waived by the board.

(m) Failure to pay a civil penalty imposed by the board after the period for requesting a hearing on the civil penalty terminates if the person or business organization against whom the penalty is imposed has not requested a hearing, or after the period for seeking judicial review of the order assessing the civil penalty has passed.

(n) Failure to comply with the terms of a consent agreement described in subsection (3) of this section.

(o) Failure to comply with any reporting or other requirement established by the board by rule.

(3) In lieu of disciplinary actions under subsection (1) of this section, the board may enter into a consent agreement with the holder of any certificate described in ORS 673.040 to 673.080, the holder of any public accountant's license, the holder of any registration described in ORS [58.345, 673.090, 673.130 or 673.160 (2)] 673.160, or the holder of any permit described in ORS 673.150, under which the holder of any certificate, license, registration or permit agrees to comply with conditions prescribed by the board.

(4) In addition to the causes in subsection (2) of this section, the board may take any of the actions described in subsection (1) of this section for dishonesty, fraud or misrepresentation not in the practice of public [accounting] accountancy.

(5) In lieu of or in addition to any action described in subsection (1) of this section, the board may take any of the following actions:

(a) Require a business organization registered under ORS 673.160 to undergo a peer review conducted as the board may specify; or

(b) Require a holder of a permit under ORS 673.150 to complete any continuing professional education programs the board may specify.

(6) In the case of a registered business organization, the board may take any of the actions described in subsection (1) of this section for any of the following additional causes:

(a) The cancellation, revocation or suspension of, or refusal to renew, the authority to provide professional services, in this state or any other jurisdiction, of any partner, officer, shareholder, member, manager or owner of the business organization; or

(b) The cancellation, revocation or suspension of, or refusal to renew, the authority of the business organization to practice public accountancy or provide other professional services in any other state or foreign jurisdiction.

(7) Notwithstanding any protective order issued under ORCP 36 C, upon motion of the board, the court shall order disclosure of materials or information subject to a protective order under ORCP 36 C. The board may use the material or information to take disciplinary action under this section.

SECTION 15. ORS 673.185 is amended to read:

673.185. (1) Where the [State] Oregon Board of Accountancy proposes to refuse to issue [or renew a certificate, registration, license or permit] a certificate, license under ORS 673.100, permit or registration, proposes to refuse to renew a permit or registration or proposes to revoke or suspend a certificate, registration, license issued under ORS 673.100 or permit, opportunity for hearing shall be accorded as provided in ORS 183.310 to 183.550 and chapter 734, Oregon Laws 1971.

(2) [Promulgation] Adoption of rules, conduct of hearings, issuance of orders and judicial review of rules and orders shall be in accordance with ORS 183.310 to 183.550 and chapter 734, Oregon Laws 1971.

(3) The decision of the board under subsection (1) of this section shall be by majority vote.

SECTION 16. ORS 673.210 is amended to read:

673.210. (1) The [State] Oregon Board of Accountancy may reissue [the certificate of any certified public accountant whose certificate] any license that it has [been] revoked[, or may renew the license of any person whose license has been revoked,] or may [reissue or] modify the suspension of any [permit] license that it has [which has been revoked or] suspended.

(2) The power of the board to suspend any [license, registration, certificate or permit] authority to provide professional services includes the power to reissue:

(a) At a time certain; or

(b) When the [person] licensee or business organization subject to suspension fulfills conditions for reissuance set by the board.

SECTION 17. ORS 673.220 is amended to read:

673.220. (1) The [State] Oregon Board of Accountancy may grant inactive status to any [public accountant or holder of a certificate of certified public accountant] licensee who is retired, not holding the licensee out to clients or the public as a public accountant and otherwise not engaged in the practice of public [accounting] accountancy, if the license is not suspended or revoked. [and who:]

[(a) Holds a valid permit issued under ORS 673.150; or]

[(b) Holds a permit issued under ORS 673.150 that has lapsed.]

(2) A [person] licensee granted inactive status by the board:

(a) [Is not required to hold a permit or pay the permit fee during the period the person is on inactive status] Shall pay any fee in an amount determined by the board by rule for becoming or remaining inactive or becoming active.

(b) [May] Shall not hold the licensee out to clients or the public as a public accountant or otherwise engage in the practice of public [accounting] accountancy until [the person is] restored to active status.

(3) The board by rule shall adopt procedures and requirements for granting and renewing inactive status and for restoring to active status any [person] licensee on inactive status. [The board by rule may impose a fee for inactive status applications and for renewal of inactive status.]

(4) The board may restore a lapsed permit to inactive status upon payment to it of all past unpaid renewal fees and the delinquent renewal fee as provided in ORS 673.150 [(6)] (5).

(5) The board shall maintain a current roster of all [persons] licensees granted inactive status.

SECTION 18. ORS 673.320 is amended to read:

673.320. [No person shall affix a signature, with any wording indicating that the person is an accountant or auditor, to any accounting or financial statement, or to any opinion on, report on or certificate to any accounting or financial statement, unless the person holds a permit issued under ORS 673.150 and not revoked or suspended; provided, however, that the provisions of this section shall not prohibit any officer, employee, partner or principal of any organization from affixing a signature to any statement or report in reference to the financial affairs of said organization with any wording designating the position, title or office which the officer, employee, partner or principal holds in said organization, nor shall the provisions of this section prohibit any act of a public official or public employee in the performance of the duties as such.]

(1) A person or business organization in this state shall not provide attestation services for or issue a report on financial statements of any other person, firm, organization or governmental unit unless the person or business organization holds a permit or registration issued under ORS 673.010 to 673.455. The prohibitions of this subsection do not apply to:

(a) An officer, partner, employee, shareholder, member, manager or owner of any firm or organization affixing that person's own signature to any statement or report in reference to the financial affairs of the firm or organization with wording designating the position, title or office that the person holds in the firm or organization;

(b) Any act of a public official or employee in the performance of official duties; or

(c) The performance by any person, other than a licensee or registrant, of other services, including the preparation of tax returns, management advisory services and the preparation of financial statements, without the issuance of reports thereon.

(2) Any transmission of financial statements or information using language as specified in ORS 673.325 or as adopted by the Oregon Board of Accountancy by rule under this subsection shall not be considered a report.

(3) A person shall not assume or use the title or designation "certified public accountant," or the abbreviation "CPA," or any other title, designation, words, letters, abbreviation, sign, card or device tending to indicate that the person is a certified public accountant, unless the person holds a valid certificate of certified public accountant issued under ORS 673.040 and a permit issued pursuant to ORS 673.150.

(4) A business organization shall not assume or use the title or designation "certified public accountant," or the abbreviation "CPA," or any other title, designation, words, letters, abbreviation, sign, card or device tending to indicate that the business organization is composed of certified public accountants unless the business organization is registered under ORS 673.160.

(5) A person shall not assume or use the title or designation "public accountant," or the abbreviation "PA," or any other title, designation, words, letters, abbreviation, sign, card or device tending to indicate that the person is a public accountant unless that person holds a valid license issued under ORS 673.100 and permit issued under ORS 673.150.

(6) A business organization shall not assume or use the title or designation "public accountant," or the abbreviation "PA," or any other title, designation, words, letters, abbreviation, sign, card or device tending to indicate that the business organization is composed of public accountants, unless the business organization is registered under ORS 673.160.

(7) A person or business organization shall not assume or use any title or designation likely to be confused with the titles "certified public accountant" or "public accountant," or any abbreviations likely to be confused with the abbreviations "CPA" or "PA," unless the person or business organization holds a valid permit or registration issued under ORS 673.010 to 673.455. This subsection does not restrict the use of any title, designation or abbreviation awarded by institutions that are recognized by the board by rule.

(8) A person or business organization shall not assume or use any title or designation that includes the words "accountant," "auditor" or "accounting" in connection with any other wording, including that of a report, that implies that the person or business organization holds a permit or registration or has special competence as an accountant or auditor, unless the person or business organization holds a permit or registration issued under ORS 673.010 to 673.455. This subsection does not prohibit:

(a) A partner, officer, employee, shareholder, member, manager or owner of any firm or organization from affixing that person's own signature to any statement or report in reference to the financial affairs of the firm or organization with wording designating the position, title or office that the person holds in the firm or organization;

(b) Any act of a public official or employee in the performance of official duties; or

(c) Use of the words "accountant" or "accounting" by a person or business offering services that are not restricted to a person or business organization holding a license or permit to practice public accountancy.

(9) A person or business organization holding a permit or registration under ORS 673.010 to 673.455 shall not use a professional or business name or designation that is misleading about the legal form of the business organization, about the persons who are partners, officers, shareholders, members, managers or owners of the business organization or about any other matter. The board by rule may specify the appropriate use by licensees of abbreviations and initials in a professional or business name. Notwithstanding any provision of this subsection, the names of one or more former partners, shareholders, members or managers may be included in the name of a registered business organization or its successor.

(10) A person holding a permit issued under ORS 673.150 shall not perform attestation services in any business organization that does not hold a valid registration under ORS 673.160.

(11) Subsections (1) to (10) of this section apply to a person or business organization holding a certification, license, permit, designation or degree granted in another jurisdiction entitling the holder to engage in the practice of public accountancy or its equivalent in the other jurisdiction unless:

(a) The activities of the person or business organization in this state are limited to the provision of professional services to clients in this state, where the clients are residents of, governments of or business entities in the other jurisdiction in which the person holds the entitlement;

(b) The person or business organization does not provide attestation services or issue reports regarding the financial statements of any other persons, organizations or governmental units in this state; and

(c) The person or business organization does not hold out to clients, potential clients or the public in this state that the person or business organization is licensed or registered under ORS 673.010 to 673.455 and does not use any title or designation other than the one under which the person or business organization practices in the other jurisdiction, followed by the name of the other jurisdiction and, if applicable, any translation of the title or designation into the English language.

SECTION 18a. ORS 673.325 is amended to read:

673.325. The following statement signed by a person who does not hold a permit issued under ORS 673.150 shall not constitute a report under ORS 673.320, so long as the statement is not accompanied by any wording indicating the person is an accountant or auditor or other language prohibited by ORS [673.020, 673.030 or] 673.310 or 673.320:

"The accompanying balance sheet of XYZ Company as of ____, 19xx, and the related statements of income (or retained earnings or cash flow) for the year then ended have been prepared by me (us).

"The information presented in these financial statements is the representation of management (owners)."

NOTE: Section 19 was deleted by amendment. Subsequent sections were not renumbered.

SECTION 20. ORS 673.350 is amended to read:

673.350. [(1)] Nothing contained in ORS 673.010 to 673.455 shall prohibit any person not a certified public accountant or public accountant from serving as an employee of [a certified public accountant or public accountant holding a permit to practice under ORS 673.150, a partnership holding a current and valid registration under ORS 673.090 or 673.130, a professional corporation registered with the State Board of Accountancy under ORS 58.345, or an other business form registered with the board under ORS 673.160 (2)] a business organization registered under ORS 673.160. However, such an employee shall not issue any report on an accounting or financial statement over that employee's name.

[(2) Nothing contained in ORS 673.010 to 673.455 shall prohibit a certified public accountant or a public accountant of another state from temporarily practicing in this state on professional business incident to that person's regular practice.]

SECTION 21. ORS 673.360 is amended to read:

673.360. Whenever in the judgment of the [State] Oregon Board of Accountancy any person has engaged, or is about to engage, in any acts or practices which constitute or [will] may constitute a violation of any of the provisions of ORS [673.020, 673.030 or 673.310 to 673.350] 673.010 to 673.455, the board may make application to the appropriate court for an order enjoining such acts or practices, and upon a showing by the board that such person has engaged, or is about to engage, in any such acts or practices, an injunction, restraining order, or such other order as may be granted by the court without bond.

SECTION 22. ORS 673.370 is amended to read:

673.370. (1) The display or uttering by a person of a card, sign, advertisement or other printed, engraved or written instrument or device, bearing a person's name in conjunction with the words "certified public accountant" or "public accountant" or any abbreviation thereof, shall be prima facie evidence in any action brought under ORS 673.360 or 673.990 that the person whose name is so displayed caused or procured the display or uttering and that the person[:] is an individual or business organization that purports to be authorized to use the words under ORS 673.010 to 673.455.

[(a) If an individual, purports to be a certified public accountant or a public accountant holding a permit under ORS 673.150.]

[(b) If a partnership, purports to be a partnership holding a current and valid registration under ORS 673.090 or 673.130.]

[(c) If a professional corporation, purports to be a professional corporation registered by the State Board of Accountancy under ORS 58.345.]

[(d) If an other business form, purports to be an other business form registered by the board under ORS 673.160 (2).]

(2) In any action referred to in subsection (1) of this section, evidence of the commission of a single act prohibited by ORS 673.010 to 673.455 shall be sufficient to justify an injunction or a conviction without evidence of a general course of conduct.

SECTION 23. ORS 673.380 is amended to read:

673.380. [All statements, records, schedules, working papers and memoranda made by a certified public accountant or public accountant incident to or in the course of professional service to clients, except reports submitted to a client, shall be and remain the property of such certified public accountant or public accountant, in the absence of an express agreement between the certified public accountant or public accountant and the client to the contrary.]

(1) All statements, records, schedules, working papers and memoranda made by a licensee under ORS 673.010 to 673.455 or a partner, shareholder, officer, director, member, manager, owner or employee of the licensee incident to or in the course of rendering services to a client, except reports submitted by the licensee to the client and records that are part of the client's records, shall be and remain the property of the licensee in the absence of an express agreement between the licensee and the client to the contrary.

(2) A statement, record, schedule, working paper or memorandum described in subsection (1) of this section shall not be sold, transferred or bequeathed, without the consent of the client or the client's personal representative or assignee, to anyone other than one or more surviving partners or stockholders, or new partners or stockholders, of the licensee or any combined or merged organization or successor in interest to the licensee.

(3) Nothing in this section prohibits a temporary transfer of working papers or other material necessary in the course of carrying out peer reviews or the disclosure of information under section 33 of this 1999 Act.

(4) A licensee shall furnish to a client or former client of the licensee, upon request and reasonable notice:

(a) A copy of the licensee's working papers, to the extent that the working papers include records that would ordinarily constitute part of the client's records and are not otherwise available to the client; and

(b) Any accounting or other records belonging to or obtained from or on behalf of the client that the licensee removed from the client's premises or received for the client's account. The licensee may make and retain copies of the documents of the client when the documents form the basis for work done by the licensee.

(5) Nothing in this section shall require a licensee to keep any working papers beyond the period prescribed in any other applicable statute.

SECTION 24. ORS 673.390 is amended to read:

673.390. The [State] Oregon Board of Accountancy shall [adopt no] not adopt a rule prohibiting a [certified public accountant, public accountant, partnership registered under ORS 673.090 or 673.130, professional corporation registered under ORS 58.345 or an other business form registered under ORS 673.160 (2)] licensee from soliciting[, by direct personal communication,] an engagement to perform professional services.

SECTION 25. ORS 673.400 is amended to read:

673.400. (1) Any person who violates any provision of ORS 673.010 to 673.455 or any rule adopted thereunder shall forfeit and pay a civil penalty into the General Fund to be credited to the [State] Oregon Board of Accountancy for its use in carrying out the provisions of this section. [a civil penalty in an amount] The civil penalty shall be in an amount determined by the board of not more than [$1,000] $5,000 for each offense.

(2) The civil penalty may be recovered by the Attorney General in an action brought in the name of the State of Oregon in any court of appropriate jurisdiction or may be imposed as provided in ORS 183.090.

(3) The provisions of this section are in addition to and not in lieu of any other penalty provided by law.

SECTION 26. ORS 673.410 is amended to read:

673.410. (1) There is created [a State] an Oregon Board of Accountancy consisting of seven members.

(2) Members of the board shall be appointed by the Governor for terms of three years, subject to confirmation by the Senate pursuant to section 4, Article III of the Oregon Constitution.

(3) The board members shall be as follows:

(a) [Five] Four must have [held] a current permit as a certified public accountant [certificates issued] under the laws of this state in effect for at least five years, and be actively engaged in public [accounting] accountancy practice.

(b) One must have a current permit as a certified public accountant under the laws of this state in effect for at least five years, and be employed in private industry, education or government or be actively engaged in public accountancy practice.

[(b)] (c) One shall be a member of the general public.

[(c)] (d) One [shall be] must have a current license as a public accountant [licensed] under the laws of this state in effect for at least five years and be actively engaged in public [accounting] accountancy practice.

(4) No person shall be eligible for reappointment after the person's third consecutive term until a period at least equal to the appointed term has elapsed.

(5) The authority of the board to enforce the provisions of ORS 673.010 to 673.455 includes the authority to regulate the practice of public [accounting] accountancy by persons or business organizations holding certificates, licenses, permits or registrations issued under ORS [673.150] 673.010 to 673.455. [The practice of public accounting for purposes of ORS 673.010 to 673.455 is the performance of, or any offering to perform, one or more kinds of services for a client or potential client involving the use of auditing or accounting skills and including:]

[(a) Issuance of reports on financial statements.]

[(b) Performance of management, advisory or consulting services.]

[(c) Preparation of tax returns or the furnishing of advice on tax matters.]

SECTION 26a. If Senate Bill 154 becomes law, sections 1 (amending ORS 673.410) and 2, chapter 415, Oregon Laws 1999 (Enrolled Senate Bill 154), are repealed.

SECTION 27. ORS 673.415 is amended to read:

673.415. [(1)] The Department of Revenue may furnish to the [State] Oregon Board of Accountancy [the names and addresses, if known, of any person who prepares an income tax return for another and may also furnish to the board the name and address of the taxpayer] a copy of the signature block of an income or other tax return or report prepared by any person for another and permitted or required to be filed with the department. The signature block may be furnished in instances in which the department or the board has reasonable grounds to believe the person preparing the return or report prepared it in violation of any provision of ORS 673.010 to 673.455. The signature block shall include the name, address and signature of the person who prepared the return or report and the date the return or report was prepared. The department shall include with the signature block the name and address of the taxpayer, the number of the tax form prepared and the tax year of the tax return prepared. The board, and its members, officers and employees, shall use the names and addresses furnished under this section solely in the enforcement of ORS 673.010 to 673.455 and shall not otherwise divulge or make known such information. A violation of this prohibition against disclosure is punishable as provided in ORS 314.991 (2).

[(2) The Department of Revenue may furnish to the board the name and address, if known, of any person who prepares a return or report permitted or required to be filed with the department for another and may also furnish to the board the name and address of the taxpayer in instances where the department or the board has reasonable grounds to believe the person preparing the return or report prepared it in violation of any provision of ORS 673.010 to 673.455, or any rule adopted thereunder. The board, its members, officers and employees, shall use the names and addresses furnished under this section solely in the enforcement of ORS 673.010 to 673.455 and shall not divulge or make known such information. Any person who violates this prohibition against disclosure, upon conviction, is punishable as provided in ORS 314.991 (2).]

SECTION 27a. If Senate Bill 158 becomes law, section 27 of this 1999 Act (amending ORS 673.415) is repealed and ORS 673.415, as amended by section 1, chapter 441, Oregon Laws 1999 (Enrolled Senate Bill 158), is amended to read:

673.415. (1) The Department of Revenue may furnish to the [State] Oregon Board of Accountancy a copy of the signature block of an income tax return prepared by any person for another. The signature block may be furnished in instances in which the department or the board has reasonable grounds to believe the person preparing the return prepared it in violation of any provision of ORS 673.010 to 673.455. The signature block shall include the name, address and signature of the person who prepared the income tax return and the date the return was prepared. The department may include with the signature block the name and address of the taxpayer, the number of the tax form prepared and the tax year of the income tax return prepared. The board, and its members, officers and employees, shall use the names and addresses furnished under this section solely in the enforcement of ORS 673.010 to 673.455 and shall not otherwise divulge or make known such information. A violation of this prohibition against disclosure is punishable as provided in ORS 314.991 (2).

(2) The Department of Revenue may furnish to the board a copy of the signature block of a tax return or report permitted or required to be filed with the department and prepared by any person for another. The signature block may be furnished in instances where the department or the board has reasonable grounds to believe the person preparing the return or report prepared it in violation of any provision of ORS 673.010 to 673.455, or any rule adopted thereunder. The signature block shall include the name, address and signature of the person who prepared the tax return or report and the date the return or report was prepared. The department may include with the signature block the name and address of the taxpayer, the number of the tax form or report prepared and the tax year of the return or report prepared. The board, its members, officers and employees, shall use the names and addresses furnished under this section solely in the enforcement of ORS 673.010 to 673.455 and shall not divulge or make known such information. Any person who violates this prohibition against disclosure, upon conviction, is punishable as provided in ORS 314.991 (2).

SECTION 28. ORS 673.440 is amended to read:

673.440. The [State] Oregon Board of Accountancy shall [have printed and published] produce, at least biennially, a compilation of ORS 673.010 to 673.455 and rules of the board. A copy of the compilation shall be [distributed] made available to all [persons holding a permit under ORS 673.150, or a registration under ORS 58.345, 673.090, 673.130 or 673.160 (2)] licensees under ORS 673.010 to 673.455[. Copies of the compilations shall be distributed] in the manner the board considers most cost effective.

SECTION 29. ORS 673.455 is amended to read:

673.455. (1) The [State] Oregon Board of Accountancy shall appoint a [Quality] Peer Review Oversight Committee. The board may also approve applications for operation of alternative [quality] peer review programs such as programs provided by the American Institute of Certified Public Accountants and the National Society of [Public] Accountants.

(2) Each [certified public accountant and public accountant holding a permit issued] business organization registered under ORS [673.150, either individually or as part of a partnership registered under ORS 673.090 or 673.130,] 673.160 that performs attestation services shall participate in a [quality] peer review program described in this section. The [quality] peer review shall be conducted by the [Quality Review Committee appointed by the] board or by an alternative [quality] peer review program approved by the board under subsection (1) of this section.

[(3) A review of the accounting practice of a certified public accountant or public accountant by an alternative quality review program shall not preclude the Quality Review Committee, upon order of the board, from conducting a review of specified aspects of the accounting practice of the certified public accountant or public accountant. A certified public accountant or public accountant whose accounting practice is reviewed by the Quality Review Committee under this subsection is not required to pay the fee described in subsection (10) of this section.]

[(4)] (3) The members of the committee serve at the pleasure of the board.

[(5)] (4) A member of the committee appointed under this section is entitled to compensation and expenses as provided in ORS 292.495.

[(6)] (5) The committee also may review:

(a) Any financial statement or report filed with the state or any political subdivision and prepared by a certified public accountant or public accountant; and

(b) Any procedure, working paper or supporting document relating to the financial statement or report.

[(7)] (6) If the client grants permission or if all information identifying the client has been removed, the committee also may review any financial statement not described in subsection [(6)] (5) of this section and prepared by a [certified public accountant or public accountant] licensee, or any procedure, working paper or supporting document relating to the financial statement.

[(8)] (7) The failure or refusal by any [person who is a] licensee[, certificate holder, permit holder or registrant] to comply with a request for review or explanation, or both, of such financial statement as set forth in this section constitutes a violation of ORS 673.170 (2)(b).

[(9) Information, recommendations, findings and reports prepared by or for the Quality Review Committee, or members of the board shall be confidential and not subject to public disclosure until the board makes a final administrative determination whether it shall take any of the actions set forth in ORS 673.170 (1). However, nothing in this subsection prohibits access by a person who is a licensee, certificate holder, permit holder or registrant, or the person's attorney to the information, recommendations, findings and reports described in this subsection and relating to the person.]

[(10) Any certified public accountant or public accountant holding a permit issued under ORS 673.150, either individually or as part of a partnership registered under ORS 673.090 or 673.130, who participates in a review of the accounting practice of the accountant conducted by the Quality Review Committee under this section shall pay a fee to the board. The board shall set the fee by rule.]

SECTION 29a. If Senate Bill 155 becomes law, sections 1 (amending ORS 673.455) and 2, chapter 405, Oregon Laws 1999 (Enrolled Senate Bill 155), are repealed.

SECTION 30. A review of the accountancy practice of a registered business organization by an alternative peer review program approved under ORS 673.455 shall not preclude the Oregon Board of Accountancy from conducting a review of specified aspects of the professional services of any licensee affiliated with the business organization or of the business organization itself.

SECTION 31. ORS 673.610 is amended to read:

673.610. ORS 673.605 to 673.740 do not apply to:

(1) Any full or part-time employee hired to fill a permanent position, who in connection with the duties as an employee has the incidental duty of preparing income tax returns for the business of the employer only.

(2) Any attorney at law rendering services in the performance of the duties of an attorney at law.

(3) While acting as such, any fiduciary, or the regular employees thereof, acting on behalf of the fiduciary estate, the testator, trustor, grantor, or beneficiaries thereof.

(4) Any certified public accountant or public accountant holding a valid permit, or a registered business organization, under ORS 673.010 to 673.455.

(5) Any person employed by a local, state or federal governmental agency but only in performance of official duties.

SECTION 32. ORS 673.990 is amended to read:

673.990. (1) Violation of any of the provisions of ORS [673.020, 673.030 or 673.310 to 673.350] 673.310, 673.320, 673.345 or 673.350 is a Class A misdemeanor. Whenever the Oregon Board of Accountancy has reason to believe that any person is liable to punishment under this subsection it may certify the facts to the Attorney General, who may, in the discretion of the Attorney General, cause appropriate proceedings to be brought.

(2) Violation of any provision of ORS 673.605 to 673.740, or any rule adopted thereunder, is a misdemeanor.

SECTION 33. (1) Except as provided in subsection (2) of this section or by permission of the client engaging a licensee, or the heirs, successors or personal representatives of the client, a licensee or any partner, officer, shareholder, member, manager, owner or employee of the licensee shall not voluntarily disclose information communicated to the licensee by the client relating to and in connection with services rendered to the client by the licensee.

(2) Nothing in subsection (1) of this section shall prohibit the disclosure of information:

(a) Required to be disclosed by the standards of the public accountancy profession in reporting on the examination of financial statements;

(b) In court proceedings, in state or federal agency proceedings, in investigations or proceedings under ORS 673.170 or 673.400, in ethical investigations conducted by private professional organizations or in the course of peer reviews;

(c) To the insurance carrier of a licensee; or

(d) Required by the Oregon Board of Accountancy to be disclosed for regulatory purposes of the board.

SECTION 34. ORS 297.680 is amended to read:

297.680. [(1) Any person residing or having an office for the regular transaction of the business of auditing or accounting in Oregon and holding a permit issued under ORS 673.150 shall be eligible to make application for admission to the roster of authorized accountants referred to in ORS 297.670.]

[(2)] The [State] Oregon Board of Accountancy shall adopt by rule:

[(a)] (1) Procedures and qualifications for admitting applicants to the roster of authorized accountants referred to in ORS 297.670;

[(b)] (2) Procedures for reviewing the qualifications of accountants admitted to the roster for continuance on the roster;

[(c)] (3) Fees payable upon application for admission to the roster; and

[(d)] (4) Procedures for making the roster available to municipal corporations described in ORS 297.405 (5) which are subject to the Municipal Audit Law.

SECTION 35. ORS 297.740 is amended to read:

297.740. The [State] Oregon Board of Accountancy may [promulgate] adopt rules necessary to exercise its powers and duties provided in ORS 297.405 to 297.555 and 297.670 to 297.740.

SECTION 36. ORS 305.230 is amended to read:

305.230. Notwithstanding ORS 9.320:

(1) Any person who is duly qualified to practice law or public [accounting] accountancy in this state or the authorized employee of a taxpayer who is regularly employed by the taxpayer in tax matters may represent the taxpayer before a tax court magistrate or the Department of Revenue in any conference or proceeding with respect to the administration of any tax.

(2) Any person who is duly licensed by the State Board of Tax Service Examiners or who is exempt from such licensing requirement as provided for and limited by ORS 673.610 may represent a taxpayer before a tax court magistrate or the department in any conference or proceeding with respect to the administration of any tax on or measured by net income.

(3) Any shareholder of an S corporation, as defined in section 1361 of the Internal Revenue Code, as amended and in effect on December 31, 1996, may represent the corporation in any proceeding before a tax court magistrate or the department in the same manner as if the shareholder were a partner and the S corporation were a partnership. The S corporation must designate in writing a tax matters shareholder authorized to represent the S corporation.

(4) Any person who is licensed as a real estate broker under ORS 696.025 or is a state certified appraiser or state licensed appraiser under ORS 674.310 or is a registered appraiser under ORS 308.010 may represent a taxpayer before a tax court magistrate or the department in any conference or proceeding with respect to the administration of any ad valorem property tax.

(5) A general partner who has been designated by members of a partnership as their tax matters partner under ORS 305.242 may represent those partners in any conference or proceeding with respect to the administration of any tax on or measured by net income.

(6) In a small claims procedure, a taxpayer may be represented by any of the persons described in subsections (1) to (5) of this section or by any other person permitted by the tax court.

(7) No person shall be recognized as representing a taxpayer pursuant to this section unless there is first filed with the magistrate or department a written authorization, or unless it appears to the satisfaction of the magistrate or department that the representative does in fact have authority to represent the taxpayer.

(8) A taxpayer represented by someone other than an attorney is bound by all things done by the authorized representative, and may not thereafter claim any proceeding was legally defective because the taxpayer was not represented by an attorney.

(9) Prior to the holding of a conference or proceeding before the tax court magistrate or department, written notice shall be given by the magistrate or department to the taxpayer of the provisions of subsections (6) and (8) of this section.

SECTION 37. ORS 309.100 is amended to read:

309.100. (1) The owner or an owner of any taxable property or the person in whose name the property is assessed, may petition to the board of property tax appeals for relief as authorized under ORS 309.026. Petitions filed under this subsection shall be filed with the clerk of the board during the period following the date the tax statements are mailed for the current tax year and ending December 31.

(2) Each petition shall:

(a) Be made in writing.

(b) State the facts and the grounds upon which the petition is made.

(c) Be signed and verified by the oath of any of the following:

(A) The owner of the property or, if the property is owned by more than one owner, any one or more of the owners.

(B) A person in whose name the property is assessed.

(C) Any relative, as defined by rule adopted by the Department of Revenue, of any owner or person described in subparagraph (A) or (B) of this paragraph.

(D) A person duly qualified to practice law or public [accounting] accountancy in this state who is representing the owner or an owner or the person in whose name the property is assessed.

(E) A legal guardian or conservator who is acting on behalf of the owner or an owner or the person in whose name the property is assessed.

(F) Any person who is licensed as a real estate broker under ORS 696.025.

(G) Any person who is a state certified appraiser or a state licensed appraiser under ORS 674.310 or who is a registered appraiser under ORS 308.010.

(H) The lessee of the property.

(d) If the petition is not signed and verified by an owner or owners or a person in whose name the property is assessed, be signed and verified by a person who holds a power of attorney executed by the owner or owners or person in whose name the property is assessed that authorizes the person to verify a petition under this section and to appear and represent the owner or owners or person at a hearing before the board. A copy of the power of attorney shall be attached to the petition.

(e) State the address to which notice of the action of the board shall be sent. The notice may be sent to the address of the owner, the person in whose name the property is assessed or to the address of the person described in paragraph (c)(B) to (H) of this subsection.

(f) State if the petitioner or a representative desires to appear at a hearing before the board.

(3) If the petitioner has requested a hearing before the board, the board shall give such petitioner at least five days' written notice of the time and place to appear. If the board denies any petition upon the grounds that it does not meet the requirements of subsection (2) of this section, it shall issue a written order rejecting the petition and set forth in the order the reasons the board considered the petition to be defective.

(4) Notwithstanding ORS 9.320, the owners or an owner of the taxable property, or the person in whose name the property is assessed may appear and represent himself or herself at the hearing before the board, or may be represented at the hearing by any of the persons described in subsection (2)(c)(B) to (H) of this section.

SECTION 38. ORS 407.185 is amended to read:

407.185. In addition to, and not in lieu of, the audit required by ORS 297.210 the Director of Veterans' Affairs may contract with an independent public [accounting firm] accountancy organization for a review of the cash flow projection for the loan program established under this chapter and Article XI-A of the Oregon Constitution and of the assumptions used in developing that projection. The review shall be conducted in accordance with the review guidelines developed by the American Institute of Certified Public Accountants (AICPA). Such contract shall require a written report, copies of which shall be provided to the Governor, the Secretary of State, the State Treasurer, the President of the Senate, and the Speaker of the House of Representatives by the director no later than December 31 of each year. Payment for the services required under the contract shall be paid from funds appropriated for the administration of the Department of Veterans' Affairs.

SECTION 39. ORS 410.480 is amended to read:

410.480. (1) Each authorized agency and service provider shall maintain books, records, documents and accounting procedures which reflect costs and such other activities as the Senior and Disabled Services Division may require. The books, records and documents shall be made available to the division upon request.

(2) Each authorized agency shall submit to the division an audit of its financial records annually. Such audits shall be conducted by an individual [licensed by the State] holding a permit issued by the Oregon Board of Accountancy under ORS 673.010 to 673.455.

(3) Fiscal and program reports shall be completed on forms provided by the division and be submitted to the division by the specified due dates.

(4) The use or disclosure by any party of any information concerning a recipient or client of authorized services described in ORS 410.410 to 410.480 for any purpose not directly connected with the administration of the responsibilities of the division, or an authorized agency or a service provider is prohibited except with written consent of the recipient, or the legal representative thereof.

SECTION 40. ORS 461.230 is amended to read:

461.230. (1) Upon recommendation of the Director of the Oregon State Lottery, the Oregon State Lottery Commission shall adopt rules that specify the method for determining winners in each lottery game, provided that, if a lottery game utilizes a drawing of winning numbers, a drawing among entries or a drawing among finalists:

(a) The drawing shall always be open to the public;

(b) The drawing shall be witnessed by an independent certified public accountant or a professional representative of an independent certified public [accounting firm] accountancy organization;

(c) Any equipment used in the drawing must be inspected by the independent certified public accountant or the professional representative of an independent certified public [accounting firm] accountancy organization and an employee of the lottery both before and after the drawing;

(d) When a drawing is held out of this state in conjunction with other state lotteries, the Oregon State Lottery shall conduct periodic studies of such drawing's security procedures. Any equipment used in such drawing must be inspected both before and after the drawing by a professional representative of an independent certified public [accounting firm] accountancy organization and a representative of the state lottery designated by the director; and

(e) The drawing and such inspections shall be recorded on both video and audio tape.

(2) The lottery may use any of a variety of existing or future methods or technologies in determining winners.

SECTION 41. ORS 670.306 is amended to read:

670.306. (1) Subsections (2) and (3) of this section shall apply only to the following professional licensing boards:

(a) State Board of Architect Examiners.

(b) Construction Contractors Board.

(c) State Board of Examiners for Engineering and Land Surveying.

(d) State Landscape Architect Board.

(e) State Landscape Contractors Board.

(f) [State] Oregon Board of Accountancy.

(g) Oregon Board of Maritime Pilots.

(h) State Board of Tax Service Examiners.

(2) A board shall fix the qualifications of and appoint an administrative officer. The determination of qualifications and appointment of an administrative officer shall be made after consultation:

(a) In the case of a board referred to in subsection (1)(a), (b), (c), (d), (e), [or] (f) or (h) of this section, with the Governor.

(b) In the case of a board referred to in subsection (1)(g) of this section, with the executive officer of the department or other agency in which the board is established.

(3) An administrative officer of a board shall not be a member of that board.

(4) Subject to the applicable rules of the State Personnel Relations Law, the board shall fix the compensation of its administrator, who shall be in the unclassified service.

(5) Subject to applicable rules of the State Personnel Relations Law, the administrative officer shall appoint all subordinate employees, prescribe their duties and fix their compensation.

SECTION 42. ORS 673.075 is amended to read:

673.075. (1) The [State] Oregon Board of Accountancy may, in accordance with its rules, grant credit to an applicant who has successfully completed a written examination given by the licensing authority in any other state. The board may grant credit under this subsection if the applicant has successfully completed a written examination in any two or more subjects described in ORS 673.060 or required by the board to be part of the written examination in this state.

(2) Any examination for which credit is granted an applicant under subsection (1) of this section shall be substantially equivalent, in the judgment of the board, to the most recent examination given by the board at the time of the granting of the credit.

SECTION 43. Sections 1, 30 and 33 of this 1999 Act are added to and made a part of ORS 673.010 to 673.455.

SECTION 44. ORS 673.020, 673.030, 673.080, 673.090, 673.095, 673.130, 673.132, 673.134, 673.136, 673.140, 673.180, 673.330 and 673.340 are repealed.

SECTION 45. (1)(a) Any person holding a certificate of certified public accountant under ORS 673.010 to 673.455 (1997 Edition) on the operative date of this 1999 Act shall be considered to hold a certificate of certified public accountant under ORS 673.010 to 673.455 as amended by this 1999 Act.

(b) Any person holding a license as a public accountant under ORS 673.010 to 673.455 (1997 Edition) on the operative date of this 1999 Act shall be considered to hold a license as a public accountant under ORS 673.010 to 673.455 as amended by this 1999 Act.

(c) Any person holding a permit under ORS 673.010 to 673.455 (1997 Edition) on the operative date of this 1999 Act shall be considered to hold a permit under ORS 673.010 to 673.455 as amended by this 1999 Act.

(d) A license or permit issued prior to the operative date of this 1999 Act shall expire on the date that the license or permit issued to the person under ORS 673.010 to 675.455 (1997 Edition) expires.

(2) Any partnership, professional corporation or other business organization registered as a partnership, professional corporation or other business form of certified public accountants or public accountants under ORS 58.345, 673.090, 673.130 or 673.160 (all 1997 Edition) on the operative date of this 1999 Act shall be considered to hold a registration as a business organization under ORS 673.160 as amended by section 12 of this 1999 Act. The registration shall expire at the same time the registration issued under ORS 58.345, 673.090, 673.130 or 673.160 (all 1997 Edition) would have expired and shall be renewed pursuant to ORS 673.010 to 673.455 as amended by this 1999 Act.

(3) Certified public accountants and public accountants who, on the operative date of this 1999 Act, hold a permit under ORS 673.150 to practice public accountancy in this state and are practicing in a business organization not already registered with the Oregon Board of Accountancy shall file an initial application for registration with the board under ORS 673.010 to 673.455, as amended by this 1999 Act, not later than the date specified by the board by rule for such registration.

(4) Any investigation, proceeding, action, prosecution or other business or matter undertaken or commenced by the State Board of Accountancy before the operative date of this 1999 Act with respect to ORS 673.455 (1997 Edition), and still pending on the operative date of this 1999 Act, may be conducted and completed by the Oregon Board of Accountancy in the same manner, under the same terms and conditions and with the same effect as though undertaken, conducted or completed before the operative date of this 1999 Act.

(5) Nothing in this 1999 Act relieves a person of an obligation with respect to a tax, fee, fine or other charge, interest, penalty, forfeiture or sanction arising under ORS 673.170 (1997 Edition) or 673.990 (1997 Edition) or other liability, duty or obligation accruing under or with respect to the duties, functions and powers amended or repealed by this 1999 Act or accruing under or with respect to any statute amended or repealed by this 1999 Act. The Oregon Board of Accountancy, Attorney General or district attorney may undertake the collection or enforcement of any such tax, fee, fine or other charge, interest, penalty, forfeiture or other liability, duty or obligation.

(6) This 1999 Act applies only to persons and business organizations required to obtain a license, certificate, permit or registration issued by the Oregon Board of Accountancy and to persons and business organizations who hold themselves out as licensees or business organizations registered with the Oregon Board of Accountancy. This 1999 Act does not apply to persons required to obtain any other license, registration or other indication of authority to engage in professional activity issued by any other board, commission or agency of this state or of the United States if the person is not otherwise engaged in activities for which authority to practice is required under ORS 673.010 to 673.455. This 1999 Act does not regulate the preparation of financial information, including financial statements and tax returns, unless the preparation of financial information constitutes the issuance of a report as defined in ORS 673.010.

SECTION 46. (1) The amendments to ORS 673.400 by section 25 of this 1999 Act apply to civil penalties imposed for violations of any provision of ORS 673.010 to 673.455 that occur on or after the operative date of this 1999 Act.

(2) The amendments to ORS 673.990 by section 32 of this 1999 Act apply to criminal penalties imposed for violations of any provision of ORS 673.310, 673.320, 673.345 or 673.350 that occur on or after the operative date of this 1999 Act.

SECTION 47. The amendments to ORS 673.410 by section 26 of this 1999 Act apply to the first appointment or reappointment to the Oregon Board of Accountancy made:

(1) On or after the operative date of this 1999 Act; and

(2) Following the expiration of the term of office of a person holding a position described in ORS 673.410 (3)(a) (1997 Edition).

SECTION 48. The Peer Review Oversight Committee appointed in ORS 673.455, as amended by section 29 of this 1999 Act, shall be considered to be a continuation of the Quality Review Committee appointed under ORS 673.455 (1997 Edition). Members of the Quality Review Committee appointed under ORS 673.455 (1997 Edition) may continue as members of the Peer Review Oversight Committee appointed under ORS 673.455, as amended by section 29 of this 1999 Act, but shall serve at the pleasure of the Oregon Board of Accountancy, as provided in ORS 673.455 (3) as amended by section 29 of this 1999 Act.

SECTION 49. (1) This 1999 Act becomes operative January 1, 2000.

(2) The Oregon Board of Accountancy may take any action before the operative date of this 1999 Act that is necessary to enable the board to exercise, on and after the operative date of this 1999 Act, all the duties, functions and powers conferred on the board by this 1999 Act.

SECTION 50. (1) The amendments to ORS 673.410 by section 26 of this 1999 Act are intended to change the name of the State Board of Accountancy to the Oregon Board of Accountancy.

(2) For the purpose of harmonizing and clarifying statute sections published in Oregon Revised Statutes, the Legislative Counsel may substitute for words designating the State Board of Accountancy, wherever they occur in Oregon Revised Statutes, other words designating the Oregon Board of Accountancy.

SECTION 51. This 1999 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 1999 Act takes effect on its passage.

Approved by the Governor June 23, 1999

Filed in the office of Secretary of State June 24, 1999

Effective date June 23, 1999

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