NEW JERSEY REGISTER
VOLUME 34, NUMBER 2
TUESDAY, JANUARY 22, 2002
RULE PROPOSAL
LAW AND PUBLIC SAFETY
DIVISION OF CONSUMER AFFAIRS
NEW JERSEY STATE BOARD OF ACCOUNTANCY
Credit-Hour Requirements; New Jersey Law And Ethics Course; Continuing
Professional Education Programs And Other Sources Of Continuing Professional
Education Credit; Criteria For Continuing Professional Education Sponsors

Proposed Amendments: N.J.A.C. 13:29-6.2, 6.5 and 6.6

Proposed New Rule: N.J.A.C. 13:29-6.3A

Authorized By: New Jersey State Board of Accountancy, Jay Church, Executive Director.

Authority: N.J.S.A. 45:2B-48, 45:2B-68 and 45:1-15.1. Calendar Reference: See Summary below for explanation of exception to calendar requirement.

Proposal Number: PRN 2002-20.

Submit comments by March 23, 2002 to:
Jay Church, Executive Director
New Jersey State Board of Accountancy
124 Halsey Street
PO Box 45000
Newark, New Jersey 07101

The agency proposal follows:

Summary

Pursuant to the general rulemaking authority set forth at N.J.S.A. 45:2B- 48(b), 45:2B-68(d) and 45:1-15.1, the New Jersey State Board of Accountancy (the Board) is proposing a new rule at N.J.A.C. 13:29-6.3A, concerning the continuing professional education requirements that licensees must satisfy prior to triennial license renewal. The proposed new rule would require all applicants for triennial license renewal to complete a Board- approved, four credit course on New Jersey law and ethics. The four credit hours earned in this new course would be included in the calculation of the 48 credit hours that licensees are required to obtain in non-technical subjects pursuant to N.J.A.C. 13:29-6.2. In order to receive Board approval for a New Jersey law and ethics course, continuing professional education sponsors must satisfy the requirements set forth in the proposed amendment at N.J.A.C. 13:29-6.6(c).

N.J.A.C. 13:29-6.6 currently delineates the criteria that sponsors of technical and other qualifying subjects must satisfy prior to obtaining Board approval for a continuing professional education course or program. In proposed new subsection (c), continuing professional education sponsors seeking approval for a course on New Jersey law and ethics are required to submit a written application to the Board containing a complete course outline and course materials. The course outline and materials must provide, at a minimum, for instruction in the Accountancy Act of 1997, set forth at N.J.S.A. 45:2B-42 et seq., the Board rules set forth at N.J.A.C. 13:29, specific provisions of the Uniform Enforcement Act set forth at N.J.S.A. 45:1-1 et seq., and the uniform regulations of the Division of Consumer Affairs set forth at N.J.A.C. 13:45C. Sponsors must also verify as part of their application that the course will be a total of four credit hours in length, and will be conducted by a qualified instructor.

Proposed new subsection (c) in N.J.A.C. 13:29-6.6 also requires sponsors to ensure that attendees are provided with copies of the legislative and regulatory materials to be covered in the course. In addition, sponsors are required to retain accurate course attendance records, as well as a written course outline for at least five years. New Jersey law and ethics course sponsors must also comply with the general requirements imposed upon all continuing professional education sponsors pursuant to N.J.A.C. 13:29-6.12.

Existing N.J.A.C. 13:29-6.6(c) is recodified as new subsection (d) and is amended to provide that sponsors who have received Board approval to offer a New Jersey law and ethics course are precluded from offering any course on New Jersey law and ethics other than the course specifically approved by the Board.

The Board is proposing the new rule and amendments in order to ensure that licensees are familiar with all aspects of New Jersey law relevant to their professional practice. The Board believes that such a course will serve to enhance a licensee's professional competency and will help to ensure that licensees are aware of the legal and ethical obligations imposed upon them under New Jersey law regarding their professional interactions with clients.

In addition to the proposed amendments discussed above, the Board is proposing technical amendments to the continuing professional education requirements set forth at N.J.A.C. 13:29-6.2, 6.5, and 6.6, for clarification purposes in light of proposed new rule N.J.A.C. 13:29-6.3A.

The Board has determined that the comment period for this proposal shall be 60 days; therefore, pursuant to N.J.A.C. 1:30-3.3(a)5, this proposal is excepted from the rulemaking calendar requirement.

Social Impact

The Board believes that proposed new rule N.J.A.C. 13:29-6.3A will have a positive impact upon members of the regulated community, as well as consumers utilizing the services of Board licensees. The proposed new rule will ensure that all licensees are well versed in the requirements of New Jersey law as it relates to their professional practice. In addition, the Board believes that the proposed amendment at N.J.A.C. 13:29-6.6(c) will have a positive impact upon continuing professional education sponsors who wish to offer a course on New Jersey law and ethics by providing clear direction to such sponsors regarding what information must be submitted in order to obtain Board approval for the course.

Economic Impact

The Board does not believe that the proposed amendments and new rule will have an economic impact upon licensees. Although licensees will incur the costs associated with taking the proposed New Jersey law and ethics course, the number of continuing professional education credits that licensees must obtain for triennial license renewal will remain unchanged and, as a result, the Board does not anticipate that licensees will incur additional costs based on the proposed changes. Sponsors wishing to offer a course in New Jersey law and ethics will incur the costs of providing the application information under N.J.A.C. 13:29-6.6(c), and complying with the substantive requirements of paragraph (c)3.

Federal Standards Statement

A Federal standards analysis is not required because the proposed amendments and new rule are governed by N.J.S.A. 45:2B-42 et seq., and are not subject to any Federal standards or requirements.

Jobs Impact

The Board does not believe that the proposed amendments and new rule will result in the creation or the loss of jobs in the State. It is possible, however, that proposed new rule N.J.A.C. 13:29-6.3A, which will require licensees to take a course on New Jersey law and ethics as part of their continuing professional education, will result in the creation of additional jobs associated with the provision of these courses, such as teaching or promotional positions with the providers of the courses.

Agriculture Industry Impact

The Board does not believe that the proposed amendments and new rule will have any impact on the agriculture industry of the State.

Regulatory Flexibility Analysis

The Regulatory Flexibility Act (the Act), N.J.S.A. 52:14B-16 et seq., requires the Board to provide a description of the types and an estimate of the number of small businesses to which the proposed amendments and new rule will apply. Currently, the Board licenses approximately 19,637 accountants. If Board licensees are considered "small businesses" within the meaning of the Act, then the following analysis applies:

The Act requires the Board to set forth the reporting, recordkeeping and other compliance requirements of the proposed amendments and new rule, including the kinds of professional services likely to be needed to comply with the requirements. The Act further requires the Board to estimate the initial and annual compliance costs of the proposed amendments and new rule, to outline the manner in which it has designed the proposed amendments and new rule to minimize any adverse economic impact upon small businesses, and to set forth whether the proposed amendments and new rule establish differing compliance requirements for small businesses.

The proposed amendments and new rule do not impose any reporting or recordkeeping requirements upon licensees. The proposed amendments to N.J.A.C. 13:29-6.6(c) do impose recordkeeping requirements upon sponsors of continuing professional education courses who wish to offer a course on New Jersey law and ethics. Specifically, subsection (c) requires sponsors to maintain accurate course attendance records, as well as a written course outline, for a minimum of five years.

The proposed amendments and new rule also impose compliance requirements upon licensees and sponsors of continuing professional education courses. The proposed amendments to N.J.A.C. 13:29-6.2(a) and the proposed new rule at N.J.A.C. 13:29-6.3A require all Board licensees to take a four credit course on New Jersey law and ethics during each triennial license period. The proposed amendments to N.J.A.C. 13:29-6.6(c) require continuing professional education sponsors who wish to offer courses on New Jersey law and ethics to apply to the Board in writing for approval to offer the course. As part of the application, sponsors must submit a complete course outline and course materials. Sponsors must also submit information documenting that the course will be a formal course of learning, that it will be a total of four credit hours in length, and that it will be conducted by a qualified instructor. Sponsors are also required to submit a certification verifying that they will provide copies of the legislative and regulatory authorities taught as part of the course to all attendees. Sponsors are prohibited from offering any New Jersey law and ethics course for continuing professional education credit other than one that has been approved by the Board.

No additional professional services will be needed to comply with the proposed amendments and new rule, nor, as discussed in the Economic Impact statement above, will the proposed amendments and new rule impose any additional compliance costs upon licensees. The Board is proposing these changes in order to ensure that its licensees are aware of the legal and ethical obligations imposed upon them by New Jersey law and, therefore, the Board believes that the proposed amendments and new rule should be uniformly applied. As a result, no differing compliance requirements for licensees are provided based upon size.

Full text of the proposal follows:

<< NJ ADC 13:29-6.2 >>

13:29-6.2 Credit-hour requirements

(a) Each applicant for a triennial license renewal is required to complete, during the preceding triennial period, 120 hours of continuing professional education. The types of continuing professional education programs and other sources of continuing professional education for which credit hours may be obtained are set forth in N.J.A.C. 13:29-6.5. The 120 hours of continuing professional education shall include at least 24 credit hours in the areas of auditing, review and compilation for persons who are engaged in the practice of public accounting or are involved with the attest function in issuing audit, review or compilation reports. All applicants shall complete at least 72 credit hours of the required 120 credit hours in the technical subjects set forth in N.J.A.C. 13:29-6.3. <<+All applicants shall complete four credit hours of the required 120 credit hours in the New Jersey law and ethics course set forth in N.J.A.C. 13:29-6.3A.+>> The remaining <<-48->> <<+44+>> credit hours of the required 120 credit hours may include subjects specified in N.J.A.C. 13:29-6.4. No licensee shall receive credit for any course offered by a Board-approved continuing professional education sponsor in subjects other than those enumerated in N.J.A.C. 13:29-6.3<<+, 6.3A+>> or 6.4.

(b)-(d) (No change.)

<< NJ ADC 13:29-6.3A >>

<<+13:29-6.3A New Jersey law and ethics course+>>

<<+Each applicant for triennial license renewal shall complete, during the preceding triennial period, a four credit course on New Jersey law and ethics approved by the Board pursuant to N.J.A.C. 13:29-6.6(c).+>>

<< NJ ADC 13:29-6.5 >>

13:29-6.5 Continuing professional education programs and other sources of continuing professional education credit.

(a) The following qualify as continuing professional education programs provided they contain the subjects enumerated in N.J.A.C. 13:29-6.3<<+, 6.3A+>> and 6.4 and meet the continuing professional education program criteria requirements as set forth in N.J.A.C. 13:29-6.6.

1.-4. (No change.)

(b) In addition to the continuing professional education programs enumerated in (a) above, continuing professional education credit also shall be awarded for the following if they fall within the subjects enumerated in N.J.A.C. 13:29-6.3<<+, 6.3A+>> and 6.4 and meet the continuing professional education program criteria as set forth in N.J.A.C. 13:29-6.6.

1.-3. (No change.)

(c) In addition to the continuing professional education programs enumerated in (a) and (b) above, continuing professional education credit also shall be granted for the following if they involve subjects enumerated in N.J.A.C. 13:29-6.3<<+, 6.3A+>> and 6.4.

1. Service as a lecturer, instructor, discussion leader, or speaker: Continuing professional education credit shall be awarded for service as a lecturer, instructor, discussion leader, or speaker in accordance with the following:

i. One credit hour shall be given for each 50-minute period of service provided the discussion is one which meets the continuing professional education subject requirements of N.J.A.C. 13:29-6.3 <<-and->><<+, 6.3A or+>> 6.4. For the lecturer's, instructor's, discussion leader's, or speaker's preparation time, there shall be awarded two additional hours of continuing professional education credit for each credit hour of instruction. Requests for credit shall be accompanied by an outline of the instruction, discussion, or presentation;

ii.-iii. (No change.)

2. (No change.)

<< NJ ADC 13:29-6.6 >>

13:29-6.6 Criteria for continuing professional education sponsors

(a) In order to qualify as a continuing professional education sponsor <<+in the subject matters set forth in N.J.A.C. 13:29-6.3 and 6.4+>>, the sponsor shall submit an application form prescribed by the Board and obtain a sponsor number. Qualified sponsors shall offer courses which meet the following requirements:

1.-4. (No change.)

(b) A continuing professional education sponsor may receive prior approval for a course of acceptable subject matter <<+set forth in N.J.A.C. 13:29-6.3 and 6.4+>> and be assigned a designated number of continuing professional education credits by the Board if the program sponsor provides, in writing and on a form provided by the Board, information required by the Board to document the elements of (a) above, and, in addition thereto, certifies that the sponsor shall:

1.-3. (No change.)

<<+(c) A continuing professional education sponsor who wishes to offer a course on New Jersey law and ethics, as set forth in N.J.A.C. 13:29-6.3A, shall apply to the Board in writing for prior approval of the course. As part of the application, the program sponsor shall submit the following:+>>

<<+1.+>> <<+A complete course outline and course materials which shall document, at a minimum, instruction in the following areas:+>>

<<+i. The Accountancy Act of 1997, N.J.S.A. 45:2B-42 et seq.;+>>

<<+ii. The rules of the New Jersey State Board of Accountancy, N.J.A.C. 13:29, specifically including, but not limited to, the rules of professional conduct set forth in N.J.A.C. 13:29-3;+>>

<<+iii. The Uniform Enforcement Act, N.J.S.A. 45:1-7.1, 7.2, 7.3 and 18 et seq.; and+>>

<<+iv. The uniform regulations of the Division of Consumer Affairs, N.J.A.C. 13:45C;+>>

<<+2. Information documenting that the course shall be:+>>

<<+i. A formal course of learning which contributes directly to the maintenance of professional competence of a licensee;+>>

<<+ii. A total of four credit hours in length; and+>>

<<+iii. Conducted by a qualified instructor or discussion leader; and+>>

<<+3. A certification verifying that the sponsor shall:+>>

<<+i. Provide copies of the materials set forth in (c)1 above to each course attendee;+>>

<<+ii. Maintain and retain accurate records of attendance at the course for a five-year period;+>>

<<+iii. Retain a written outline of course materials for a five-year period; and+>>

<<+iv. Comply with the requirements of N.J.A.C. 13:29-6.12 relative to the responsibilities of program sponsors.+>>

<<-(c)->><<+(d)+>> A continuing professional education sponsor <<+ who has qualified as a sponsor pursuant to (a) above, or has obtained prior Board approval for a course pursuant to (b) above,+>> shall not offer courses for continuing professional education credit to any Board licensee in subject matters other than those enumerated in N.J.A.C. 13:29-6.3 or 6.4. <<+A continuing professional education sponsor who has obtained Board approval pursuant to (c) above shall not offer any New Jersey law and ethics course for continuing professional education credit to any Board licensee other than the law and ethics course approved by the Board to fulfill the four credit hour requirement set forth in N.J.A.C. 13:29-6.2.+>>

34 N.J.R. 433(a)

END OF DOCUMENT


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