Untitled Texas Attorney General Opinion ( 1985 )

.
The Attorney General of Texas
JIM MAlTOX hgcat 28, 1985
4ttorney General
Su~rrmr Court BulldIng Mr. Bob E. Bradley opinion No. m-340
P. 0. aor 12549 Executive Director
4urtin. l-x. 70711.2546 Texas State Board of Re: Whether the State Board of
51214752501
Public Accountancy Public Accountancy may require
Telex 9101674-1367
1033 La Posada. Suite 340 ;tg:;nt6 for licensing to
Tdeco~ier 51214750266
Austin, Texas 78751 character reference6
from Texas residents
714 J4ckx.n. Sulie 700
Dallas. TX. 752024506
Dear Mr. Bradley:
2141742.6944
On behalf of the Stste Board of Public Accountancy, you question
4824 Alberta Ave.. Suite 160 the constitutionali~r of the board’6 Substantive Rule 511.21 in light
El Paso. TX. 799052793 of the Supreme Court’s recent decisiou in Supreme Court of New
9156333464 Rampshire v. Piper, mm- U.S. -, 105 S. Ct. 1272 (1985). Pou also ask
whether the PLper ca!w applies to section 12 of the Public Accountancy
h. has. sw 700
tact of 1979. article 41a-1, V.T.C.S. Both provisions deal vith state
Hw,,cm, TX. 77002~3111 residency issue6 relevant to certification as a certified public
71312235666 accountant in Texas.
The primary p~,oviaion in queation is an administrative rule
606 Broadway. Suits 312
enacted pursuant to the board’s authority to promulgate rules
Lubbock. TX. 79401.3479
606!747.5238 necessary to effect the Public Accountancy Act. V.T.C.S. art. 41a-1.
%6(a). The rule is related to the requirement that a certified public
accountant In Texas s,hall he a person of “good moral character.” -Id.
4309 N. Tenth. Suite 8
512(b). Substantive Rule 511.21 provides, in part, that
McAllen. TX. 76501.1665
5W662.4547
[a]11 appXcation6 for certification by examina-
tion shall be made on forms prescribed by the
200 Main Plaza. Suite 4W board and ahall also be in compliance vith board
San Antonio. TX. 762052797
rules and law. Each applicant must alao submit
512l2254191
authentlcsted copies of transcripts ahcwlng
compliance: with the applicable educettoa require-
ments. I:a,ch applicant shall eubmit with his
initial allplication, and a6 instructed thereafter,
references, from three certified public accountants
or other substantial and reprerentative business
or profea~s:lonal individuals residing in Texan who
can atteet to applicant’s moral cheracter.
(Emphasis added).
9 Tex. Reg. 5293 (l!M4).
p. 1589
Hr. Bob B. Bradloy - Paso 2 W-348) .
Sectlun 12 of the Public 1u:countancy Act provider, in part, that
the board shall grant the certlficato of a certified public accountant
tb any person vho. among other thlngr,
is a citizen of the Mired Statea or vho. if not a
cltixen, has lived io the State of Texas for the
90 day6 imediately preceding the date of rub-
mittins to the boar’1 the initial epplicati( m to
take the kitten cxamititioti~ Gnductld by-
board for the purporlr of granting a certificate of
‘Certtfied Public Accounkant’ or, bar maintained
permiment legal realdence in Texas for the six
months immediately jkreceding the date of sub-
mieaion. . . . (gmph~asi6 added).
The Unfted States Supreue Court’6 decision in Supreme Court of
Nev Hampshire V. Piper, swra, prompted your request about the
con6titutionality of the ?i~idency requirementa in these two
provisions. In Piper, the Suylreme Court struck doun a rule of the Nev
Iiampehire Supreme Court vhich excluded nonresidents from the state
bar. The Court held that the PrivIlegea and Immunities Clause of
article IV, section 2 of tbe United States Constitution forbid6 a
state from discriminating agaf:nst citizens from other statea in favor
of it6 OM citizens. Article IV, section 2 of the Constitution
provide6 that the “citizens of each state shall be entitled to all
Privileges and Immunities of Citizens in the several 6tate.s.” The
clause requires analyria o!i whether a particular activity is a
“privilege” under the clause, vhether there is a SUbStantial raaeon
for discriminatory treatment Iof nonreSidentS, and whether the degree
or mathod of discrimination bears a close relationship to it8 reason.
105 S. Ct. at 1278-79.
The Privileges and Ipmur~ities Clause applies only vith respect to
“privileges” bearing upon the vitality of the nation as an entity.
The instant ca6e involves the practice of public accountancy. For
purposes of the Privileges .rnd Iaunitirs Clause. thir profession
deserve8 no less protection t.han that granted to the practice of lav
in Piper or to th; rhrimp-fkhing at i;sue in Toomer v. Witsell, 334
U.S. 385 (1948).
The board’s Substantlvc! Rule 511.21 requires that all appllca-
tions for certification by r~aminetlon shall include references from
individual6 vho reside in Texan. Although this rule on Its face
applies to both residents and nonreeldent6, it is plain that its
burden falls won nonreeldtmts. In our oulnlon. the United States
Supreme Court iill not igame the obvioua -effect- of such a restric-
tion. For example, in Austin v. Rev Rampshire, 420 U.S. 656. 659
(1975). the Court atruc~&vn a commuter’6 income tax under the
p. 1590
‘-.v.r. Bob C. Bradley - Page 3, gJn-348) _
Privileges aad Ismunitids Clsuse because of the ovecvhetlng fsct
that, in prscticc, the tax f4:l.l lxcluolvely oa nonresidents. We take
notice of the fact that similr~r considerations apply here.
Accordingly , we concluile that Substantive Rule 511.21 cannot
stand under the Privileges and Imunities Clause of article IV.
section 2 unless the board cm demonstrate that there is a substantial
reason for the difference lo trestment and that the discrimination
practiced against nonresidwts bears a substantial relationship to
that reason. You have suboftted non reasons supporting the requirement
that character references be furnished by Texas residents. Ue cannot
consider, in the abstract, whet possible justifications might be
submitted. You do not ask -- snd thus we do uot predict -- how a
court would respond to s due process or equal protection clsim against
the rule in question. See gwerally Schware v. Board of Bar Examiners
of New Mexico, 353 U.S. 232 (1957); l4emorial Hospital v. Marlcops
County, 415 U.S. 250 (1974).
You also mention section 12 of the Public Accountancy Act of 1979
In light of Supreme Court of-New Rampshire v. Piper, &. Section
12 requires that persons vho are not citizens of the United States
live 1; Texas for 50 days-or ,maintain permanent legal residence for 6
months immediately preceding the date they submit their application to
take the board’s vritten exsninstion. The issues involved in Piper do
not reach this restriction OD foreign nationals because Piper dealt
only with the Privileges and Immunities Clause of srtlcle IV, section
2, which expressly applies only to persons who are “citizens” of s
state. See In re Johnson’s E:state,
VP 73 P. 424, 426 (Cal. 1903). You
do not ask about and we therefore do not address the validity of
section 12 under other prov::sions of the United States Constitution.
See generally Toll v. Morenc,, 458 U.S. 1 (1982) (state may not impose
burdens on lavfullv sdmittctl aliens which are not contemplated by
* Congress); Plper v.- Do?, 457 U.S. 202 (1982) (Equal Protection Clause
extends to ; s rege.Idless of citizenship); see also Examining
Board of Engine&s, Architects, and Surveyors v. Plores de Otero, 426
U.S. 572, 602-605 (1976); De?anas v. Bica, 424 U.S. 351 (1976); Zn re
Griffiths; 413 U.S. 717 y?I73); Attorney General Opinions JMz
JM-267, JW241 (1984); cf. Suffling v. Bondurant, 339 F. Supp. 257
(D.c.N.M. 1972) (6 monthz&dency requirement prior to admission to
bar provided constitutionr,‘LIy retisonable time for examination of
character and fitness), aff’d
-- sub nom. Rose v. Bondurant. 409 U.S.
1020 (1972).
The Texas Bosrd of Public Accountancy’s Sub-
stantive Rule 511.21, requiring applicants to
furnish character references from Texas residents.
__
cannot stand under the Privileges mu Inmmltles
p. 1591
Mr. Bob C. Brsdley - Paga b (Jkl-348)
Clause of article 1:V. leetion 2 of the United
States Constitution unless the board can demn-
strate that there LIB a lubetantlal reason for
diecriminating against nonresidents by requiring
that character refe:rences be furnished by Texer
residents and that the discrimination prreticed
bears a substantial wlationship to that reason.
JIU MATTOX
Attorney General of Texas
TOM GRER'N
First Assistant Attorney General
DAVID R. RICRARDS
Executive Assistsnt Attorney General
ROBERT GRAY
Special Assistant Attorney Ger.eral
RICR GILPIN
Chairman, Opinion Committee
Prepared by Jennifer Riggs
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Rick Gilpin, Chairwm
Tony Guilloxy
Jim Moellinger
Jennifer Riggs
Nancy Sutton
Sarah Uoelk
p. 1592