PART 8. TEXAS APPRAISER LICENSING AND CERTIFICATION BOARD
CHAPTER 153. RULES RELATING TO PROVISIONS OF THE TEXAS APPRAISER LICENSING AND CERTIFICATION ACT
The Texas Appraiser Licensing and Certification Board (TALCB) proposes amendments to 22 TAC §153.241, Sanctions Guidelines.
The proposed amendments to §153.241 add additional factors that may be considered in determining the disposition of a formal complaint, specifically whether an appraisal or conduct at issue was investigated by another governmental agency and the likelihood of the same or similar conduct occurring again. Additionally, the amendments allow for greater flexibility in sanctions for First Time Discipline, Level 2 violations of the Act or Statute.
Kathleen Santos, General Counsel, has determined that for the first five-year period the proposed amendments are in effect, there will be no fiscal implications for the state or units of local government as a result of enforcing or administering the proposed amendments. There is no adverse economic impact anticipated for local or state employment, rural communities, small businesses, or micro businesses as a result of implementing the proposed amendments. There is no significant economic cost anticipated for persons who are required to comply with the proposed amendments. Accordingly, no Economic Impact statement or Regulatory Flexibility Analysis is required.
Ms. Santos has also determined that for each year of the first five years the proposed amendments and rules are in effect the public benefits anticipated as a result of enforcing the proposed amendments will be requirements that are consistent with statutes and easier to understand, apply, and process.
Growth Impact Statement:
For each year of the first five years the proposed amendments and rules are in effect the amendments and rules will not:
- create or eliminate a government program;
- require the creation of new employee positions or the elimination of existing employee positions;
- require an increase or decrease in future legislative appropriations to the agency;
- require an increase or decrease in fees paid to the agency;
- create a new regulation;
- expand, limit or repeal an existing regulation; and
- increase the number of individuals subject to the rule's applicability.
For each year of the first five years the proposed amendments are in effect, there is no anticipated impact on the state's economy.
Comments on the proposed amendments may be submitted to Kathleen Santos, General Counsel, Texas Appraiser Licensing and Certification Board, P.O. Box 12188, Austin, Texas 78711-2188 or emailed to general.counsel@talcb.texas.gov. Comments may also be submitted electronically at https://www.talcb.texas.gov/agency-information/rules-and-laws/comment-on-proposed-rules. The deadline for comments is 30 days after publication in the Texas Register.
The amendments are proposed under Texas Occupations Code §1103.151, which authorizes TALCB to adopt rules related to certificates and licenses that are consistent with applicable federal law and guidelines adopted by the AQB; and §1103.154, which authorizes TALCB to adopt rules relating to professional conduct.
The statute affected by these amendments is Chapter 1103, Texas Occupations Code. No other statute, code or article is affected by the proposed amendments.
§153.241.Sanctions Guidelines.
In determining the proper disposition of a formal complaint pending as of or filed after the effective date of this rule, and subject to the maximum penalties authorized under Texas Occupations Code §1103.552, staff, the administrative law judge in a contested case hearing, and the Board shall consider the following sanctions guidelines and list of non-exclusive factors as demonstrated by the evidence in the record of a contested case proceeding.
(1) For the purposes of these sanctions guidelines:
(A) A person will not be considered to have had a prior warning letter, contingent dismissal or discipline if that prior warning letter, contingent dismissal or discipline was issued by the Board more than seven years before the current alleged violation occurred;
(B) Prior discipline is defined as any sanction (including administrative penalty) received under a Board final or agreed order;
(C) A violation refers to a violation of any provision of the Act, Board rules or USPAP;
(D) "Minor deficiencies" is defined as violations of the Act, Board rules or USPAP which do not impact the credibility of the appraisal assignment results, the assignment results themselves and do not impact the license holder's honesty, integrity, or trustworthiness to the Board, the license holder's clients, or intended users of the appraisal service provided;
(E) "Serious deficiencies" is defined as violations of the Act, Board rules or USPAP that:
(i) impact the credibility of the appraisal assignment results, the assignment results themselves or do impact the license holder's honesty, trustworthiness or integrity to the Board, the license holder's clients, or intended users of the appraisal service provided; or
(ii) are deficiencies done with knowledge, deliberate or willful disregard, or gross negligence that would otherwise be classified as "minor deficiencies";
(F) "Remedial measures" include, but are not limited to, training, mentorship, education, reexamination, or any combination thereof; and
(G) The terms of a contingent dismissal agreement will be in writing and agreed to by all parties. Staff may dismiss the complaint with a non-disciplinary warning upon written agreement that the Respondent will complete all remedial measures within the agreed-upon timeframe. If the Respondent fails to meet the deadlines in the agreement, the Respondent's license or certification will be automatically set to inactive status until the Respondent completes the remedial measures set forth in the agreement.
(2) List of factors to consider in determining proper disposition of a formal complaint:
(A) Whether the Respondent has previously received a warning letter or contingent dismissal and, if so, the similarity of facts or violations in that previous complaint to the facts or violations in the instant complaint matter;
(B) Whether the Respondent has previously been disciplined;
(C) If previously disciplined, the nature of the prior discipline, including:
(i) Whether prior discipline concerned the same or similar violations or facts;
(ii) The nature of the disciplinary sanctions previously imposed; and
(iii) The length of time since the prior discipline;
(D) The difficulty or complexity of the appraisal assignment(s) at issue;
(E) Whether the violations found were of a negligent, grossly negligent or a knowing or intentional nature;
(F) Whether the violations found involved a single appraisal/instance of conduct or multiple appraisals/instances of conduct;
(G) To whom were the appraisal report(s) or the conduct directed, with greater weight placed upon appraisal report(s) or conduct directed at:
(i) A financial institution or their agent, contemplating a lending decision based, in part, on the appraisal report(s) or conduct at issue;
(ii) The Board;
(iii) A matter which is actively being litigated in a state or federal court or before a regulatory body of a state or the federal government;
(iv) Another government agency or government sponsored entity, including, but not limited to, the United States Department of Veteran's Administration, the United States Department of Housing and Urban Development, the State of Texas, Fannie Mae, and Freddie Mac; or
(v) A consumer contemplating a real property transaction involving the consumer's principal residence;
(H) Whether Respondent's violations caused any harm, including financial harm, and the extent or amount of such harm;
(I) Whether Respondent acknowledged or admitted to violations and cooperated with the Board's investigation prior to any contested case hearing;
(J) The level of experience Respondent had in the appraisal profession at the time of the violations, including:
(i) The level of appraisal credential Respondent held;
(ii) The length of time Respondent had been an appraiser;
(iii) The nature and extent of any education Respondent had received related to the areas in which violations were found; and
(iv) Any other real estate or appraisal related background or experience Respondent had;
(K) Whether Respondent can improve appraisal skills and reports through the use of remedial measures;
(L) Whether the appraisal or conduct at issue was investigated by another governmental agency with jurisdiction and any action taken; and
(M) The likelihood of the same or similar conduct occurring again.
(3) The following sanctions guidelines shall be employed in conjunction with the factors listed in paragraph (2) of this rule to assist in reaching the proper disposition of a formal complaint:
(A) 1st Time Discipline Level 1--violations of the Act, Board rules, or USPAP which evidence minor deficiencies will result in one of the following outcomes:
(i) Dismissal;
(ii) Dismissal with non-disciplinary warning letter; or
(iii) Contingent dismissal with remedial measures.
(B) 1st Time Discipline Level 2--violations of the Act, Board rules, or USPAP which evidence serious deficiencies will result in one of the following outcomes:
(i) Dismissal with non-disciplinary warning letter;
(ii) [(i)] Contingent dismissal
with remedial measures; or
(iii) [(ii)] A final order which
imposes one or more of the following:
(I) Remedial measures;
(II) Required promulgation, adoption and implementation of written, preventative policies or procedures addressing specific areas of professional practice;
(III) A probationary period with provisions for monitoring the Respondent's practice;
(IV) Restrictions on the Respondent's ability to sponsor any appraiser trainees;
(V) Restrictions on the scope of practice the Respondent is allowed to engage in for a specified time period or until specified conditions are satisfied; or
(VI) Up to $250 in administrative penalties per act or omission which constitutes a violation(s) of the Act, Board rules, or USPAP, not to exceed $3,000 in the aggregate.
(C) 1st Time Discipline Level 3--violations of the Act, Board rules, or USPAP which evidence serious deficiencies and were done with knowledge, deliberately, willfully, or with gross negligence will result in a final order which imposes one or more of the following:
(i) A period of suspension;
(ii) A revocation;
(iii) Remedial measures;
(iv) Required promulgation, adoption and implementation of written, preventative policies or procedures addressing specific areas of professional practice;
(v) A probationary period with provisions for monitoring the Respondent's practice;
(vi) Restrictions on the Respondent's ability to sponsor any appraiser trainees;
(vii) Restrictions on the scope of practice the Respondent is allowed to engage in for a specified time period or until specified conditions are satisfied; or
(viii) Up to $1,500 in administrative penalties per act or omission which constitutes a violation(s) of the Act, Board rules, or USPAP, up to the maximum $5,000 statutory limit per complaint matter.
(D) 2nd Time Discipline Level 1--violations of the Act, Board rules, or USPAP which evidence minor deficiencies will result in one of the following outcomes:
(i) Dismissal;
(ii) Dismissal with non-disciplinary warning letter;
(iii) Contingent dismissal with remedial measures; or
(iv) A final order which imposes one or more of the following:
(I) Remedial measures;
(II) Required promulgation, adoption and implementation of written, preventative policies or procedures addressing specific areas of professional practice;
(III) A probationary period with provisions for monitoring the Respondent's practice;
(IV) Restrictions on the Respondent's ability to sponsor any appraiser trainees;
(V) Restrictions on the scope of practice the Respondent is allowed to engage in for a specified time period or until specified conditions are satisfied; or
(VI) Up to $250 in administrative penalties per act or omission which constitutes a violation(s) of the Act, Board rules, or USPAP, up to the maximum $5,000 statutory limit per complaint matter.
(E) 2nd Time Discipline Level 2--violations of the Act, Board rules, or USPAP which evidence serious deficiencies will result in a final order which imposes one or more of the following:
(i) A period of suspension;
(ii) A revocation;
(iii) Remedial measures;
(iv) Required promulgation, adoption and implementation of written, preventative policies or procedures addressing specific areas of professional practice;
(v) A probationary period with provisions for monitoring the Respondent's practice;
(vi) Restrictions on the Respondent's ability to sponsor any appraiser trainees;
(vii) Restrictions on the scope of practice the Respondent is allowed to engage in for a specified time period or until specified conditions are satisfied; or
(viii) Up to $1,500 in administrative penalties per act or omission which constitutes a violation(s) of the Act, Board rules, or USPAP, up to the maximum $5,000 statutory limit per complaint matter.
(F) 2nd Time Discipline Level 3--violations of the Act, Board rules, or USPAP which evidence serious deficiencies and were done with knowledge, deliberately, willfully, or with gross negligence will result in a final order which imposes one or more of the following:
(i) A period of suspension;
(ii) A revocation;
(iii) Remedial measures;
(iv) Required promulgation, adoption and implementation of written, preventative policies or procedures addressing specific areas of professional practice;
(v) A probationary period with provisions for monitoring the Respondent's practice;
(vi) Restrictions on the Respondent's ability to sponsor any appraiser trainees;
(vii) Restrictions on the scope of practice the Respondent is allowed to engage in for a specified time period or until specified conditions are satisfied; or
(viii) Up to $1,500 in administrative penalties per act or omission which constitutes a violation(s) of the Act, Board rules, or USPAP, up to the maximum $5,000 statutory limit per complaint matter.
(G) 3rd Time Discipline Level 1--violations of the Act, Board rules, or USPAP which evidence minor deficiencies will result in a final order which imposes one or more of the following:
(i) A period of suspension;
(ii) A revocation;
(iii) Remedial measures;
(iv) Required promulgation, adoption and implementation of written, preventative policies or procedures addressing specific areas of professional practice;
(v) A probationary period with provisions for monitoring the Respondent's practice;
(vi) Restrictions on the Respondent's ability to sponsor any appraiser trainees;
(vii) Restrictions on the scope of practice the Respondent is allowed to engage in for a specified time period or until specified conditions are satisfied; or
(viii) $1,000 to $1,500 in administrative penalties per act or omission which constitutes a violation(s) of the Act, Board rules, or USPAP, up to the maximum $5,000 statutory limit per complaint matter.
(H) 3rd Time Discipline Level 2--violations of the Act, Board rules, or USPAP which evidence serious deficiencies will result in a final order which imposes one or more of the following:
(i) A period of suspension;
(ii) A revocation;
(iii) Remedial measures;
(iv) Required promulgation, adoption and implementation of written, preventative policies or procedures addressing specific areas of professional practice;
(v) A probationary period with provisions for monitoring the Respondent's practice;
(vi) Restrictions on the Respondent's ability to sponsor any appraiser trainees;
(vii) Restrictions on the scope of practice the Respondent is allowed to engage in for a specified time period or until specified conditions are satisfied; or
(viii) $1,500 in administrative penalties per act or omission which constitutes a violation(s) of the Act, Board rules, or USPAP, up to the maximum $5,000 statutory limit per complaint matter.
(I) 3rd Time Discipline Level 3--violations of the Act, Board Rules, or USPAP which evidence serious deficiencies and were done with knowledge, deliberately, willfully, or with gross negligence will result in a final order which imposes one or more of the following:
(i) A revocation; or
(ii) $1,500 in administrative penalties per act or omission which constitutes a violation(s) of the Act, Board rules, or USPAP, up to the maximum $5,000 statutory limit per complaint matter.
(J) 4th Time Discipline--violations of the Act, Board rules, or USPAP will result in a final order which imposes one or more of the following:
(i) A revocation; and
(ii) $1,500 in administrative penalties per act or omission which constitutes a violation(s) of USPAP, Board rules, or the Act, up to the maximum $5,000 statutory limit per complaint matter.
(K) Unlicensed appraisal activity will result in a final order which imposes a $1,500 in administrative penalties per unlicensed appraisal activity, up to the maximum $5,000 statutory limit per complaint matter.
(4) In addition, staff may recommend any or all of the following:
(A) reducing or increasing the recommended sanction or administrative penalty for a complaint based on documented factors that support the deviation, including but not limited to those factors articulated under paragraph (2) of this subsection;
(B) probating all or a portion of any sanction or administrative penalty for a period not to exceed five years;
(C) requiring additional reporting requirements; and
(D) such other recommendations, with documented support, as will achieve the purposes of the Act, Board rules, or USPAP.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on May 14, 2024.
TRD-202402160
Kathleen Santos
General Counsel
Texas Appraiser Licensing and Certification Board
Earliest possible date of adoption: June 30, 2024
For further information, please call: (512) 936-3088
CHAPTER 511. ELIGIBILITY
SUBCHAPTER H. CERTIFICATION
The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.163 concerning Board-Approved Ethics Requirement and Examination on the Rules of Professional Conduct.
Background, Justification and Summary
The Board wants a CPA to be familiar with the Board's Ethics Rules concurrent with initial licensure. With CPA candidates permitted to take the CPA exam at 120 hours, the CPE on the Ethics Rules should not be tied to a rule addressing the exam. The requirement of CPE on the Rules of Professional Conduct is being removed from this rule in order that it may be addressed in Board Rule 523.130 and initial licensure.
Fiscal Note
William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.
Public Benefit
The adoption of the proposed rule amendment will familiarize the newly licensed CPA with the licensee's Rules of Professional Conduct upon initial licensure and assist in protecting the public.
Probable Economic Cost and Local Employment Impact
Mr. Treacy, Executive Director, has determined that there will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.
Small Business, Rural Community and Micro-Business Impact Analysis
William Treacy, Executive Director, has determined that the proposed amendment will not have an adverse economic effect on small businesses, rural communities or micro-businesses because the amendment does not impose any duties or obligations upon small businesses, rural communities or micro-businesses; therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis are not required.
Government Growth Impact Statement
William Treacy, Executive Director, has determined that for the first five-year period the amendment is in effect, the proposed rule: does not create or eliminate a government program; does not create or eliminate employee positions; does not increase or decrease future legislative appropriations to the Board; does not increase or decrease fees paid to the Board; does not create a new regulation; limits the existing regulation; does not increase or decrease the number of individuals subject to the proposed rule's applicability; and does not positively or adversely affect the state's economy.
Takings Impact Assessment
No takings impact assessment is necessary because there is no proposed use of private real property as a result of the proposed rule revision.
The requirement related to a rule increasing costs to regulated persons does not apply to the Texas State Board of Public Accountancy because the rule is being proposed by a self-directed semi-independent agency. (§2001.0045(c)(8))
Public Comment
Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 505 E. Huntland Dr., Suite 380, Austin, Texas 78752 or faxed to his attention at (512) 305-7854, no later than noon on July 1, 2024.
The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses. If the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted; and finally, describe how the health, safety, environmental, and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).
Statutory Authority
The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code §901.151, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.
No other article, statute or code is affected by this proposed amendment.
§511.163.[Board-Approved Ethics Requirement
and] Examination on the Board's Rules of Professional
Conduct Requirements.
An applicant applying for the issuance of the CPA certificate must pass an examination on the board's Rules of Professional Conduct.
(1) The examination on the Rules of Professional Conduct must be completed not more than six months prior to the issuance of the CPA certificate.
(2) A grade of 85% or higher on the exam is considered passing.
[(a) An applicant applying for the
issuance of the CPA certificate must successfully complete a board-approved
four-hour ethics course of comprehensive study on the board's Rules
of Professional Conduct offered through a board-approved and registered
provider of CPE.]
[(b) An applicant is not required to comply with subsection (a) of this section if the applicant has completed an ethics course from a board recognized institution of higher education within two years of the date the board receives the applicant's application for issuance of the CPA certificate.]
[(c) An applicant applying for the issuance of the CPA certificate must also pass an examination on the board's Rules of Professional Conduct.]
[(1) The examination on the Rules of Professional Conduct must be completed not more than six months prior to the issuance of the CPA certificate.]
[(2) A grade of 85% on the exam is considered passing.]
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on May 16, 2024.
TRD-202402201
J. Randel (Jerry) Hill
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: June 30, 2024
For further information, please call: (512) 305-7842
SUBCHAPTER C. ETHICS RULES: INDIVIDUALS AND SPONSORS
The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.130 concerning Ethics Course Requirements.
Background, Justification and Summary
The Board wants a CPA to be familiar with the Board's Ethics Rules concurrent with initial licensure. This rule requires a licensee to take CPE on the Rules of Professional Conduct within two years of initial licensure.
Fiscal Note
William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.
Public Benefit
The adoption of the proposed rule amendment will assure that new licensees are familiar with the Board's Ethics rules within two years of licensure and every other year thereafter.
Probable Economic Cost and Local Employment Impact
Mr. Treacy, Executive Director, has determined that there will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.
Small Business, Rural Community and Micro-Business Impact Analysis
William Treacy, Executive Director, has determined that the proposed amendment will not have an adverse economic effect on small businesses, rural communities or micro-businesses because the amendment does not impose any duties or obligations upon small businesses, rural communities or micro-businesses; therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis are not required.
Government Growth Impact Statement
William Treacy, Executive Director, has determined that for the first five-year period the amendment is in effect, the proposed rule: does not create or eliminate a government program; does not create or eliminate employee positions; does not increase or decrease future legislative appropriations to the Board; does not increase or decrease fees paid to the Board; does not create a new regulation; limits the existing regulation; does not increase or decrease the number of individuals subject to the proposed rule's applicability; and does not positively or adversely affect the state's economy.
Takings Impact Assessment
No takings impact assessment is necessary because there is no proposed use of private real property as a result of the proposed rule revision.
The requirement related to a rule increasing costs to regulated persons does not apply to the Texas State Board of Public Accountancy because the rule is being proposed by a self-directed semi-independent agency. (§2001.0045(c)(8))
Public Comment
Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 505 E. Huntland Dr., Suite 380, Austin, Texas 78752 or faxed to his attention at (512) 305-7854, no later than noon on July 1, 2024.
The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses. If the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted; and finally, describe how the health, safety, environmental, and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).
Statutory Authority
The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code §901.151, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.
No other article, statute or code is affected by this proposed amendment.
§523.130.Ethics Course Requirements.
(a) A licensee [An applicant for certification
or registration] must complete a board-approved four CPE credit
ethics course, as required by §523.131 of this chapter (relating
to Board Approval of Ethics Course Content), beginning two years following
the expiration of initial licensure. This four CPE credit ethics course
is designed to thoroughly familiarize the licensee [applicant] with the board's Rules of Professional Conduct [no
more than two years prior to submission of the application].
Proof of completion of this course must be submitted with the license
renewal notice [application].
(b) A licensee must take the [a]
four CPE credit ethics course required by [that has
been approved by the board pursuant to] §523.131 of this
chapter and as defined in §523.102 of this chapter (relating
to CPE Purpose and Definitions) [(relating to Board Approval
of Ethics Course Content)] every two years, and[.
The licensee] shall report completion of the course on the annual
license renewal notice at least every second year.
(c) A licensee granted retired, permanent disability, or other exempt status is not required to complete the ethics course during the licensee's exempt status. If the exempt status is no longer applicable, the licensee must complete an ethics course approved by the board and report it on the annual license renewal notice.
[(d) A licensee must take the ethics
course in a program as defined in §523.102 of this chapter (relating
to CPE Purpose and Definitions).]
(d) [(e)] A licensee [person] who does not reside in the state of Texas, who has no
clients within this state, and who is current with the ethics course
requirements of his state of residence is not required to take the mandated
ethics course [mandated]. A licensee [person
] meeting these requirements may claim an exemption pursuant
to §523.113 of this chapter (relating to Exemptions from CPE).
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on May 16, 2024.
TRD-202402202
J. Randel (Jerry) Hill
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: June 30, 2024
For further information, please call: (512) 305-7842
The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.140 concerning Program Standards.
Background, Justification and Summary
A CPE self-study program must contain at least three questions for each "learning objective to help the student understand the materials studied. The rule was not intended to require three questions for each CPE credit. The rule is being revised to clarify that the questions must be tied to learning objectives.
Fiscal Note
William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.
Public Benefit
The adoption of the proposed rule amendment will clarify that the self-study program must contain at least three questions related to learning objectives.
Probable Economic Cost and Local Employment Impact
Mr. Treacy, Executive Director, has determined that there will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.
Small Business, Rural Community and Micro-Business Impact Analysis
William Treacy, Executive Director, has determined that the proposed amendment will not have an adverse economic effect on small businesses, rural communities or micro-businesses because the amendment does not impose any duties or obligations upon small businesses, rural communities, or micro-businesses; therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis are not required.
Government Growth Impact Statement
William Treacy, Executive Director, has determined that for the first five-year period the amendment is in effect, the proposed rule: does not create or eliminate a government program; does not create or eliminate employee positions; does not increase or decrease future legislative appropriations to the Board; does not increase or decrease fees paid to the Board; does not create a new regulation; limits the existing regulation; does not increase or decrease the number of individuals subject to the proposed rule's applicability; and does not positively or adversely affect the state's economy.
Takings Impact Assessment
No takings impact assessment is necessary because there is no proposed use of private real property as a result of the proposed rule revision.
The requirement related to a rule increasing costs to regulated persons does not apply to the Texas State Board of Public Accountancy because the rule is being proposed by a self-directed semi-independent agency. (§2001.0045(c)(8))
Public Comment
Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 505 E. Huntland Dr., Suite 380, Austin, Texas 78752 or faxed to his attention at (512) 305-7854, no later than noon on July 1, 2024.
The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses. If the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted; and finally, describe how the health, safety, environmental, and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).
Statutory Authority
The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code §901.151, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.
No other article, statute or code is affected by this proposed amendment.
§523.140.Program Standards.
(a) Potential participants should be informed in advance of course content, learning objectives, prerequisites, and recommended credits so they can determine whether they are qualified to participate in and benefit from the program. The stated learning objectives should clearly communicate the specific areas of knowledge that will be covered. If there are no prerequisites for the course, a statement to this effect must be made.
(b) The program developer must organize the program around the stated learning objectives and must retain a copy of the final program, including electronic media, in accordance with §523.143(b) of this chapter (relating to Sponsor's Record). The final program must contain sufficient documentation to support the number of CPE credits granted. The course materials must be periodically reviewed to assure that they are accurate and consistent with currently accepted standards relating to the program's subject matter. The program developer should provide the instructor with separate materials that emphasize sections of the course that need reinforcement, if appropriate.
(c) Instructors must be qualified both with respect to program content and teaching methods used. Sponsors shall evaluate the performance of instructors at the conclusion of each program to determine their suitability for continuing to serve as instructors.
(d) All programs must provide for some means to evaluate both the competence of the instructor and the course material. Refer to §523.141 of this chapter (relating to Evaluation).
(e) Self-study programs must conform to the requirements outlined in §523.102(c)(2) of this chapter (relating to CPE Purpose and Definitions).
(1) Program must include at least three review questions
for each learning objective [CPE credit, or two review
questions if the program is marketed for one-half CPE credits]
to allow the participant the opportunity to understand the material.
Evaluative feedback must be provided for each incorrect response.
(2) To provide evidence of satisfactory completion of the course, CPE sponsors must require participants to successfully complete a final exam with a passing grade of at least 70%. The final exam must have at least five questions for each CPE credit granted and no more than 25% of the questions be "true/false" in nature.
(3) Program or course expiration date. Course documentation must include an expiration date (the time by which the participant must complete the final exam). The expiration date should be no longer than one year from the date of purchase.
(f) Nano programs must use instructional methods that clearly define a minimum of one learning objective, guide the participant through a program of learning, and provide evidence of a participant's satisfactory completion of the program. Satisfactory completion of the program must be confirmed at the conclusion of the program by passing a final exam.
(1) To provide evidence of satisfactory completion of the course, CPE sponsors must require participants to successfully complete a final exam with a passing grade of 100 percent before issuing CPE credit for the course. The final exam may contain questions of varying format (for example, multiple choice, rank order, and matching). Only two questions must be included on the final exam. "True or false" questions are not permissible on the final exam. If the participant fails the final exam CPE credit will not be granted. The participant may re-take the program and the number of re-takes permitted is at the sponsor's discretion.
(2) Program or course expiration date. Course documentation must include an expiration date. The expiration date is no longer than one year from the date of purchase.
(3) Based on materials developed for instructional use, Nano programs must be based on materials specifically developed for instructional use and not on third-party materials. Nano learning programs requiring only the reading of general professional literature, IRS publications, or reference manuals followed by an assessment will not be acceptable.
(g) Blended programs must use instructional methods that clearly define learning objectives and guide the participant through a program of learning. Pre-program, post-program, and homework assignments should enhance the learning program experience and must relate to the defined learning objectives of the program.
(1) Blended programs include different learning or instructional methods (for example, lectures, discussion, guided practice, reading, games, case studies, and simulation); different delivery methods (group live, group Internet based, nano learning, or self study); and/or different levels of guidance (for example, individual, instructor or subject matter expert led, or group and social learning). To guide participants through the learning process, CPE program sponsors must provide clear instructions and information to participants that summarize the different components of the program and what must be completed or achieved during each component in order to qualify for CPE credits. The CPE program sponsor must document the process and components of the course progression and completion of components by the participants.
(2) To provide evidence of satisfactory completion of sections of the course that are not "live" (such as nano or self-study) CPE sponsors must require participants to successfully complete an exam with a passing grade appropriate to the delivery method (i.e. 70% for self-study, 100% for nano).
(h) Sponsors are responsible for ensuring the participants register their attendance during the program. Sponsors are responsible for assigning the appropriate number of CPE credits for participants, including reduced CPE credits for those participants who arrive late or leave early. Refer to §523.142 of this chapter (relating to Program Time Credit Measurement for Sponsors).
(i) Sponsors must comply with all CPE rules including §523.143 of this chapter.
(j) Sponsors awarding CPE credit for a board authorized ethics course defined in §523.131 of this chapter (relating to Board Approval of Ethics Course Content) must do so through a board authorized instructor as defined in §523.132 of this chapter (relating to Board Authorized Ethics Instructors).
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on May 16, 2024.
TRD-202402203
J. Randel (Jerry) Hill
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: June 30, 2024
For further information, please call: (512) 305-7842