HB 2573

                            HOUSE BILL No. 2573
AN ACT concerning the Kansas board of accountancy; relating to licensure requirements
   for certified public accountants; amending K.S.A. 1-202, 1-301, 1-302a, 1-302b, 1-
   307, 1-310, 1-321 and 1-322 and repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:
    Section 1. K.S.A. 1-202 is hereby amended to read as follows: 1-
202. (a) Each year the board shall meet and organize by electing a
chairperson and a vice-chairperson vice chairperson from its
membership. The board shall appoint a secretary, who need not be a
member of the board. The board shall have a seal and shall meet at the
call of the chairperson but not less than twice each year and shall have
a seal. The chairperson and the secretary of the board shall have the
power to administer oaths.
    (b) The board shall keep records of all proceedings and actions by
and before it. In any proceedings in court, civil or criminal, arising out
of or founded upon any provisions of this act, copies of such records
which that are certified as correct by the secretary of the board under
the seal of the board shall be admissible in evidence and shall be prima
facie evidence of the correctness of the contents thereof.
    (c) The board may:
    (1) Provide for certification, notification and registration and issue
permits to practice in accordance with the provisions of this act;
    (2) adopt, amend and revoke rules and regulations governing its
administration and enforcement of this act, including, but not limited
to: (A) Educational qualifications required under K.S.A. 1-302a, and
amendments thereto; (B) experience qualifications required under
K.S.A. 1-302b, and amendments thereto; (C) continuing professional
education qualifications required under K.S.A. 1-310, and amendments
thereto; (D) professional conduct directed to controlling the quality of
services by licensees, and dealing among other things with
independence, integrity and objectivity, competence and technical
standards, responsibilities to the public and clients, commissions and
referral fees, contingent fees, advertising, firm names, discreditable acts
and communication with the board; (E) professional standards
applicable to licensees; (F) the manner and circumstances of use of the
titles "certified public accountant" and "C.P.A."; (G) peer reviews
required in K.S.A. 1-501, and amendments thereto; and (H) the
definition of substantial equivalency for purposes of K.S.A. 1-322, and
amendments thereto; and (I) such other rules and regulations as the
board may deem necessary to regulate the practice of certified public
accountancy.
    (d) The board shall:
    (1) Keep accounts of its receipts and disbursements;
    (2) keep a register of Kansas certificates issued by the board;
    (3) deny, revoke, suspend and reinstate certificates, notifications,
firm registrations and permits; and
    (4) initiate proceedings, hold hearings and do all things necessary
to regulate the practice of certified public accountancy.
    (e) Any statements on standards and guides imposed by the board
shall meet the standards or guides developed for general application
either by the American institute of certified public accountants or the
division of accounts and reports which that are in effect on July 1,
2001, or any later version as adopted by the board in rules and
regulations.
    (f) A majority of the board shall constitute a quorum for the
transaction of any business at any meeting of the board.
    Sec. 2. K.S.A. 1-301 is hereby amended to read as follows: 1-301.
(a) The board shall charge and collect a fee from each applicant for a
Kansas certificate or notification and shall charge and collect a fee for a
Kansas permit to practice as a certified public accountant in this state;
and shall charge and collect a fee for firm registrations in this state. The
board or the board's designated examination service may charge an
examination application processing fee. Each fee payable to the board
or the examination service shall accompany the appropriate application.
                    HOUSE BILL No. 2573—page 2
    (b) The board shall adopt rules and regulations fixing the fees
provided to be charged and collected under this section, which shall be
as follows:
    (1) For issuance of a certificate (initial or duplicate), an amount
not to exceed $50;
    (2) for issuance of a reciprocal certificate, an amount not to
exceed $350;
    (3) for issuance or renewal of a permit to practice for the holder of
a Kansas certificate, an amount not to exceed $350, subject to
paragraphs (4) and (6);
    (4) for issuance or renewal of a permit to practice for the holder of
a Kansas certificate whose permit is issued or renewed for a period of
12 months or less, an amount equal to 1/2 the amount of the fee fixed
under paragraph (3), subject to paragraph (6);
    (5) for issuance of a duplicate permit to practice for the holder of a
Kansas certificate, an amount not to exceed $50;
    (6) for reinstatement of a permit to practice in the case of the
holder of a Kansas certificate who had in some prior year held a permit
to practice but who did not hold such a permit for the year immediately
preceding the period for which a permit to practice is requested, or
who, if holding a permit to practice for such period immediately
preceding applies for renewal subsequent to the expiration date of such
permit, an amount equal to 11/2 times the amount of the fee then fixed
under paragraph (3) or paragraph (4), whichever is applicable; and
    (7) for notification or renewal of notification required pursuant to
K.S.A. 1-322, and amendments thereto, an amount not to exceed $150;
and
    (8) for an initial or an annual firm registration, an amount not to
exceed $300;
    (9)(8) for renewing a firm registration after the expiration, an
amount equal to 11/2 times the amount of the fee then fixed under
paragraph (8);
    (10)(9) for examination application processing by the board, an
amount not to exceed $150.
    (c) On or before May 30 each year, the board shall determine the
amount of funds that will be required during the ensuing year to carry
out and enforce the provisions of law administered by the board and
may adopt rules and regulations to change any fees fixed under this
section as may be necessary, subject to the limitations prescribed by
this section. Upon changing any renewal fees as provided by this
section, the board shall immediately notify all holders of permits to
practice and of firm registrations of the amount of such fees. The fees
fixed by the board and in effect under this section immediately prior to
the effective date of this act shall continue in effect until such fees are
fixed by the board by rules and regulations as provided by this section.
    Sec. 3. K.S.A. 1-302a is hereby amended to read as follows: 1-
302a. (a) The education requirement prescribed by K.S.A. 1-302, and
amendments thereto, is satisfied if the applicant meets all one of the
following requirements:
    (1) Is the holder of a baccalaureate or higher academic degree
from a college or university approved by the board, the total education
program to include a concentration in accounting or equivalent as
determined by the board;
    (2) has been awarded credit by a college or university approved by
the board for at least 150 semester hours, with a concentration in
accountingis the holder of a baccalaureate or higher academic degree
from a college or university approved by the board and has been
awarded credit for an additional 30 semester hours by a college or
university approved by the board, the total educational program to
include a concentration in accounting or equivalent as determined to
be appropriate by the board; and or
    (3) the credit for the concentration in accounting is accepted by
the boardis the holder of a post-baccalaureate academic degree from a
college or university approved by the board, the total educational
                    HOUSE BILL No. 2573—page 3
program to include a concentration in accounting or equivalent as
determined to be appropriate by the board.
    (b) An applicant for admission to take the initial examination in
this state as required in K.S.A. 1-302, and amendments thereto, must
submit evidence satisfactory to the board or to the examination service
that the applicant either:
    (1) Meets any of the requirements of subsection (a); or
    (2) reasonably expects to meet the requirements of subsection (a)
within 60 days from the date the applicant takes the first section of such
examination. The applicant shall submit final official transcripts and
any documents verifying completion of the education requirements of
subsection (a) to the board or the examination service within 120 days
after the applicant has taken the first section of the examination. If final
official transcripts and any documents verifying completion of such
education requirements are not received by the board or the
examination service within 120 days after the applicant has taken the
first section of the examination, the applicant's grades for all sections of
the examination may be voided, subject to notice and an opportunity
for the applicant to be heard pursuant to the Kansas administrative
procedures act.
    (c) The board may define, by rules and regulations, the term
"concentration in accounting." The board may also prescribe, by rules
and regulations, the type and amount of credit submitted pursuant to
subsection (a).
    Sec. 4. K.S.A. 1-302b is hereby amended to read as follows: 1-
302b. (a) No applicant who holds a Kansas certificate issued by the
board shall receive a permit to practice in this state as a certified public
accountant until the applicant submits evidence, satisfactory to the
board, of having completed either one year of accounting experience
for applicants applying on the basis of K.S.A. 1-302a(a)(2) or (a)(3),
and amendments thereto, or two years of accounting experience for
applicants applying on the basis of K.S.A. 1-302(a)(1), and
amendments thereto. This experience shall include providing any type
of service or advice involving the use of attest or nonattest skills all of
which was verified by a certified public accountant holding an active
license to practice, meeting requirements prescribed by the board by
rule. This experience would be acceptable if it was gained through
employment in government, industry, academia or public practice.
    (b) Any individual permit holder who is responsible for
supervising attest or compilation services and signs or authorizes
someone to sign the accountant's report on any attest or compilation
service on behalf of the firm, shall meet the experience or competency
requirements, as adopted by the board through rules and regulations.
    (c) Any individual permit holder who signs or authorizes someone
to sign the accountant's report on any attest or compilation service on
behalf of the firm, shall meet the experience or competency
requirement of subsection (b).
    (d) As an alternative to the requirements of subsection (a), an
individual with an active license issued by another state who
establishes such individual's principal place of business in this state
shall request the issuance of both a certificate and a permit to practice
from the board prior to establishing such principal place of business.
The board may issue both a certificate and a permit to such individual
who is eligible under the substantial equivalency standard set out in
either paragraph (1) or paragraph (2) of subsection (a) of K.S.A. 1-322
meets the qualifications and requirements in either K.S.A. 1-322(a)(1)
or (2), and amendments thereto. An application under this section may
be made through an appraisal service or similar organization approved
by the board. Any individual meeting the requirements set forth in this
subsection who is denied a certificate and a permit to practice shall
have the opportunity to be heard pursuant to the Kansas administrative
procedures act.
    Sec. 5. K.S.A. 1-307 is hereby amended to read as follows: 1-307.
(a) The board, in its discretion, may waive the examination of and may
                    HOUSE BILL No. 2573—page 4
issue a certificate to a holder of a certificate as a "certified public
accountant" issued under the laws of any state upon a showing that:
    (1) The applicant passed the examination required for issuance of
the applicant's certificate with grades that would have been passing
grades at the time in this state; and the applicant: (A) Meets all current
requirements in this state for the issuance of a certificate at the time
application is made; (B) at the time of the issuance of the applicant's
certificate in the other state, met all such requirements then applicable
in this state; or (C) had four years of experience of the type described in
K.S.A. 1-302b(a), and amendments thereto, after passing the
examination upon which the applicant's certificate was based and
within the 10 years immediately preceding the application; or
    (2) the applicant meets the substantial equivalency standard
qualifications and requirements set out in either K.S.A. 1-322(a)(1) or
(2), and amendments thereto.
    (b) The board shall issue a certificate to a holder of a foreign
designation, granted in a foreign country entitling the holder thereof to
engage in the practice of certified public accountancy, provided that:
    (1) The foreign authority which that granted the designation
makes similar provision to allow a person who holds a valid certificate
issued by this state to obtain such foreign authority's comparable
designation;
    (2) the foreign designation: (A) Was duly issued by a foreign
authority that regulates the practice of certified public accountancy and
the foreign designation has not expired or been revoked or suspended;
(B) entitles the holder to issue reports upon financial statements; and
(C) was issued upon the basis of educational, examination and
experience requirements established by the foreign authority or by law;
    (3) the applicant: (A) Received the designation, based on
educational and examination standards substantially equivalent similar
to those in effect in this state at the time the foreign designation was
granted; (B) completed an experience requirement, substantially
equivalent similar to the requirement set out in K.S.A. 1-302b, and
amendments thereto, in the jurisdiction which that granted the foreign
designation; and (C) passed a uniform qualifying examination in
national standards and an examination on the laws, regulations and
code of ethical conduct in effect in this state acceptable to the board;
and
    (4) the applicant shall in the application list all jurisdictions,
foreign and domestic, in which the applicant has applied for or holds a
designation to practice public accountancy.
    Each holder of a certificate issued under this subsection shall notify
the board in writing, within 30 days after its occurrence, of any
issuance, denial, revocation or suspension of a designation or
commencement of a disciplinary or enforcement action by any
jurisdiction. The board has the sole authority to interpret the application
of the provisions of this subsection.
    Sec. 6. K.S.A. 1-310 is hereby amended to read as follows: 1-310.
(a) Permits to engage in the practice of certified public accountancy in
this state shall be issued by the board to persons who have met the
requirements under K.S.A. 1-302b, and amendments thereto.
    (b) Each holder of a Kansas certificate, which is numbered with an
odd number, who is qualified under K.S.A. 1-302b, and amendments
thereto, shall have a permit to practice issued or renewed on a biennial
basis, which shall expire on the next July 1 which that occurs after the
date that the permit was issued or renewed and which occurs in an odd-
numbered year.
    (c) Each holder of a Kansas certificate, which is numbered with an
even number, who is qualified under K.S.A. 1-302b, and amendments
thereto, shall have a permit to practice issued or renewed on a biennial
basis, which shall expire on the next July 1 which that occurs after the
date that the permit was issued or renewed and which occurs in an
even-numbered year.
    (d) A person may renew a permit within 12 months of its
                   HOUSE BILL No. 2573—page 5
expiration date if such person submits a complete and sufficient
renewal application together with the fee prescribed by K.S.A. 1-301,
and amendments thereto.
   (e) As a condition for renewal of a permit to practice, the board
may require all permit holders to furnish with such applicant's renewal
application, evidence of participation in continuing education in
accounting, auditing, or related areas of at least 80 hours during the
two-year period for renewal unless the board waives all or a portion of
the continuing education requirements.
   (f) The board may exempt from the continuing education
requirements an individual who holds a permit from another state if:
   (1) The permit holder has a principal place of business located
outside the state of Kansas;
   (2) the permit holder verifies to the board's satisfaction that such
person has met the continuing education requirements of the state in
which the principal place of business is located; and
   (3) the board considers the continuing education requirements of
the state in which the principal place of business is located to be
substantially equivalent similar to those of Kansas.
   (g) A person who fails to renew a permit within 12 months after its
expiration may apply for reinstatement by making application on a
form provided by the board, submitting a reinstatement fee as
prescribed by K.S.A. 1-301, and amendments thereto, and submitting
proof that such person has obtained 40 hours of qualifying continuing
education within the preceding 12 months prior to applying for
reinstatement.
   Sec. 7. K.S.A. 1-321 is hereby amended to read as follows: 1-321.
When used in chapter 1 of the Kansas Statutes Annotated, and
amendments thereto, the following terms shall have the meanings
indicated:
   (a) "Actively participate" means participation that is continuous as
one's primary occupation.
   (b) "Affiliated entity" means one that provides services to the CPA
firm or provides services to the public that are complementary to those
provided by the CPA firm.
   (c) "AICPA" means the American institute of certified public
accountants.
   (d) "Attest" means providing the following services:
   (1) Any audit or other engagement to be performed in accordance
with the statements on auditing standards (SAS);
   (2) any audit to be performed in accordance with the Kansas
municipal audit guide;
   (3) any review of a financial statement to be performed in
accordance with the statements on standards for accounting and review
services (SSARS);
   (4) any engagement, except a compilation, to be performed in
accordance with the statements on standards for attestation
engagements (SSAE); and
   (5) any engagement to be performed in accordance with the
standards of the PCAOB.
   (e) "Board" means the Kansas board of accountancy established
under K.S.A. 1-201, and amendments thereto.
   (f) "Certificate" means a certificate as a certified public accountant
issued under K.S.A. 1-302, and amendments thereto, or a certificate as
a certified public accountant issued after examination under the law of
any other state.
   (g) "Client" means a person or entity that agrees with a permit
holder or firm to receive any professional service.
   (h) "Compilation" means providing a service to be performed in
accordance with the statements on standards for accounting and review
services (SSARS) or the statements on standards for attestation
engagements (SSAE) the objective of which is to present in the form of
financial statements, information that is the representation of
management or owners, or both, without undertaking to express any
                    HOUSE BILL No. 2573—page 6
assurance on the statements.
    (i) "Directed" means the location to which the engagement letter is
sent.
    (j) "Equity capital" means: (1) Capital stock, capital accounts,
capital contributions or undistributed earnings of a registered firm as
referred to in K.S.A. 1-308, and amendments thereto; and (2) loans and
advances to a registered firm made or held by its owners. "Equity
capital" does not include an interest in bonuses, profit sharing plans,
defined benefit plans or loans to a registered firm from banks, financial
institutions or other third parties that do not actively participate in such
registered firm.
    (k) "Firm" means:
    (1) An individual who operates as a sole practitioner and who
issues reports subject to peer review; or
    (2) any business organization, including, but not limited to, a
general partnership, limited liability partnership, general corporation,
professional corporation or limited liability company.
    (l) "Good moral character" means lack of a history of dishonesty
or a felonious act.
    (m) "Active license" means a certificate or a permit to practice
issued by another state that is currently in force and authorizes the
holder to practice certified public accountancy.
    (n) "Licensee" means the holder of a certificate or a permit to
practice issued by this state or another state.
    (o) "Manager" means a manager of a limited liability company.
    (p) "Member" means a member of a limited liability company.
    (q) "NASBA" means the national association of state boards of
accountancy.
    (r) "Nonattest" means providing the following services:
    (1) The preparation of tax returns and providing advice on tax
matters;
    (2) the preparation of any compilation;
    (3) management advisory, consulting, litigation support and
assurance services, except for attest services;
    (4) financial planning;
    (5) valuation services; and
    (6) any other financial service not included in the statements on
auditing standards, the statements on standards for accounting and
review services, the standards for attestation engagements as developed
by the American institute of certified public accountants or as defined
by the board.
    (s) "PCAOB" means the public company accounting oversight
board created by the Sarbanes-Oxley act of 2002.
    (t) "Practice of certified public accountancy" means performing or
offering to perform attest or nonattest services for the public while
using the designation "certified public accountant" or CPA in
conjunction with such services.
    (u) "Practice of public accountancy" means performing or offering
to perform attest or nonattest services for the public by a person not
required to have a permit to practice or a firm not required to register
with the board.
    (v) "Principal place of business" means the primary office location
designated by the licensee for purposes of substantial equivalency and
reciprocity from which the licensee or applicant engages in the
practice of certified public accountancy. Each licensee or applicant
shall designate a principal place of business that shall be accepted by
the board unless the board determines that a different location is the
licensee's or applicant's primary office location.
    (w) "Professional" means arising out of or related to the
specialized knowledge or skills associated with CPAs.
    (x) "Report," when used with reference to any attest or
compilation service, means an opinion, report or other form of
language that states or implies assurance as to the reliability of the
attested information or compiled financial statements and that also
                   HOUSE BILL No. 2573—page 7
includes or is accompanied by any statement or implication that the
person or firm issuing it has special knowledge or competence in
accounting or auditing. 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 person or firm is an
accountant or auditor or from the language of the report itself. The term
report includes any form of language which that disclaims an opinion
when such form of language is conventionally understood to imply any
positive assurance as to the reliability of the attested information or
compiled financial statements referred to or special competence on the
part of the person or firm issuing such language; and it. "Report" also
includes any other form of language that is conventionally understood
to imply such assurance or such special knowledge or competence.
    (y) "Rule" means any rule or regulation adopted by the board.
    (z) "State" means any state of the United States, the District of
Columbia, Puerto Rico, the U.S. Virgin Islands and Guam;, except that
"this state" means the state of Kansas.
    (aa) "Substantial equivalency" is a determination by the board of
accountancy or its designee that the education, examination and
experience requirements contained in the statutes and administrative
rules of another jurisdiction are comparable to, or exceed the education,
examination and experience requirements contained in the uniform
accountancy act or that an individual CPA's education, examination and
experience qualifications are comparable to or exceed the education,
examination and experience requirements contained in the uniform
accountancy act. In ascertaining substantial equivalency as used in this
act, the board shall take into account the qualifications without regard
to the sequence in which experience, education or examination
requirements were attained.
    (bb) "Uniform accountancy act" means model legislation issued
by the AICPA and NASBA in existence on July 1, 2007.
    Sec. 8. K.S.A. 1-322 is hereby amended to read as follows: 1-322.
(a) (1) An individual whose principal place of business is not in this
state having an active license in good standing to practice certified
public accountancy from any state which the board or its designee has
verified to be in substantial equivalence with the CPA licensure
requirements of the uniform accountancy act shall be presumed to have
qualifications substantially equivalent to this state's requirements and
may shall be granted all the privileges of permit holders of this state
without the need to obtain a permit issued under K.S.A. 1-310, and
amendments thereto;, or otherwise register with the board or pay any
fee provided that at the time of initial licensure, the individual was
required to show evidence of having passed the uniform CPA
examination and having met one of the following three requirements:
    (A) A baccalaureate or higher academic degree from a college or
university approved by the board, the total educational program to
include a concentration in accounting or equivalent as determined to
be appropriate by the board, and not less than two years of accounting
experience, as defined by board rule;
    (B) a baccalaureate or higher academic degree from a college or
university approved by the board and an additional 30 semester hours
from a college or university approved by the board, the total
educational program to include a concentration in accounting or
equivalent as determined to be appropriate by the board, and not less
than one year of accounting experience, as defined by board rule; or
    (C) a post-baccalaureate or higher academic degree from a
college or university approved by the board, the total educational
program to include a concentration in accounting or equivalent as
determined to be appropriate by the board, and not less than one year
of accounting experience, as defined by board rule.
    (2) An individual whose principal place of business is not in this
state having an active license in good standing to practice certified
public accountancy from any state which the board or its designee has
not verified to be in substantial equivalency with the CPA licensure
                   HOUSE BILL No. 2573—page 8
requirements of the uniform accountancy act shall be presumed to have
qualifications substantially equivalent to this state's requirements and
may be granted and who, as of December 31, 2025, had practice
privileges in this state under this section shall continue to have all the
privileges of permit holders of this state without the need to obtain a
permit to practice issued under K.S.A. 1-310, and amendments thereto,
if such individuals' certified public accountancy qualifications are
substantially equivalent to the following requirements:
    (A) Have at least 150 semester hours of college education,
including a baccalaureate or higher academic degree, with a
concentration in accounting as defined by the home licensing
jurisdiction, from a college or university;
    (B) obtains credit for passing each of the four test sections of the
uniform certified public accountant examination; and
    (C) possess at least one year of experience including service or
advice involving the use of accounting, attest, compilation,
management advisory, financial advisory, tax or consulting skills, all of
which were verified by a certified public accountant holding an active
license to practice.
    Any individual who has passed the uniform certified public
accountant examination and holds a valid license to practice certified
public accountancy issued by another state prior to January 1, 2012,
may be exempt from the education requirement in subsection (a)(2)(A)
for the purposes of this section or to otherwise register with the board
or pay any fee.
    (b) Any licensee of another state exercising the privilege afforded
under subsection (a) this section and the firm which that employs that
such licensee hereby simultaneously consent, as a condition of the
grant of this privilege:
    (1) To the personal and subject matter jurisdiction of this board;
    (2) to the appointment of the state regulatory body which that
issued their licenses as the agent upon whom process may be served in
any action or proceeding by the Kansas board against the licensee;
    (3) to cease offering or rendering professional services in this state
individually and on behalf of the firm in the event that the license from
the state of the individual's principal place of business is no longer
valid; and
    (4) to comply with this act and the board's rules and regulations.
    (c) An individual who has been granted practice privileges under
this section who, for any client in this state, performs any of the
following services: (1) Any audit or other engagement to be performed
in accordance with the statements on auditing standards (SAS); (2) any
audit to be performed in accordance with the Kansas municipal audit
guide; (3) any review of a financial statement to be performed in
accordance with the statements on standards for accounting and review
services (SSARS); (4) any engagement, except a compilation, to be
performed in accordance with the statements on standards for
attestation engagements (SSAE); and (5) any engagement to be
performed in accordance with the standards of the PCAOB; may only
do so through a firm which that has registered pursuant to K.S.A. 1-
308, and amendments thereto.
    (d) Any individual prohibited from practicing certified public
accountancy in this state, as a result of having a permit, certificate or
practice privilege revoked or suspended by the board, shall not be
granted practice privileges under this section without first obtaining the
approval of the board.
    (e) A holder of a permit to practice issued by this state offering or
rendering services or using a CPA title in another state may be subject
to disciplinary action in this state for an act committed in another state
for which the permit holder would be subject to discipline for an act
committed in the other state. The board shall investigate any complaint
made by the board of accountancy of another state.
                         HOUSE BILL No. 2573—page 9
   Sec. 9. K.S.A. 1-202, 1-301, 1-302a, 1-302b, 1-307, 1-310, 1-321
and 1-322 are hereby repealed.
   Sec. 10. This act shall take effect and be in force from and after its
publication in the Kansas register.
I hereby certify that the above BILL originated in the House, and passed
that body
HOUSE concurred in
SENATE amendments __________________________________________________________________
                                                                 Speaker of the House.
                                                              Chief Clerk of the House.
Passed the SENATE
         as amended
                                                                   President of the Senate.
                                                                   Secretary of the Senate.
APPROVED ______________________________________________________________________________
                                                                                 Governor.