.



### JIMMAlTOX 4ttorney General

Su~rrmr CourtBulldIng P.0.aor12549 4urtin. l-x. 70711.2546 51214752501 Telex 9101674-1367 Tdeco~ier 51214750266

714J4ckx.n. Sulie 700 Dallas. TX. 752024506 2141742.6944

4824Alberta Ave..Suite 160 ElPaso.TX. 799052793 9156333464

h. has. sw 700 Hw,,cm, TX. 77002~3111 71312235666

606Broadway. Suits 312 Lubbock. TX. 79401.3479 606!747.5238

4309 N.Tenth. Suite 8 McAllen. TX. 76501.1665 5W662.4547

200Main Plaza. Suite 4W SanAntonio. TX. 762052797 512l2254191 

# TheAttorney General ofTexas
hgcat 28, 1985

Mr. Bob

### E. Bradley Executive Director Texas State Board of Public Accountancy 1033 LaPosada. Suite 340 Austin, Texas 78751 opinion No. m-340 Re: Whether the State Board 

### of Public Accountancy may require ;tg:;nt6 

### for licensing to

character reference6 fromTexas residents Dear Mr. Bradley: Onbehalf 

### of the Stste Board of Public Accountancy, you question the constitutionali~r 

### of the board’6 Substantive Rule 511.21 in light of the Supreme Court’s recent decisiou in Supreme Court of New 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 tact of 1979. article 41a-1, V.T.C.S. Both provisions deal vith state residency issue6 relevant to certification as a certified public accountant in Texas. The primary p~,oviaion in queation is an administrative rule enacted pursuant 

### to the 

### board’s authority to promulgate rules necessary to effect the Public Accountancy 

### Act. V.T.C.S. art. 41a-1. %6(a). The rule is related to 

### the requirement that 

### acertified public accountant In Texas s,hall he aperson of “good moral character.” Id. - 

### 512(b). Substantive Rule 511.21 provides, in part, 

### that

[a]11 appXcation6 

### for certification by examination shall be made on forms prescribed by the board and ahall also be in compliance vith board rules and law. Each applicant 

### must alao submit authentlcsted copies of transcripts ahcwlng compliance: with the applicable educettoa requirements. 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). 9Tex. Reg. 5293 (l!M4).

p. 1589

### Hr.BobB.Bradloy -

## Paso2 W-348)

.

Sectlun 12

### of the Public 1u:countancy 

### Act provider, in part, 

### that the board 

### shall grant thecertlficato ofacertified public accountant tb any person 

### vho. amongother 

### thlngr,

is 

### acitizen of the Mired 

### Statea orvho. if not a cltixen, has lived io 

### the State 

### of Texas for the 90 day6 imediately preceding the 

### date of rubmittins to the boar’1 the initial epplicati( 

### mto take the 

### kitten cxamititioti~ Gnductld byboard for the purporlr

### of granting acertificate 

### of

‘Certtfied Public 

### Accounkant’ 

### or,bar maintained permiment legal realdence in Texas for the six months immediately jkreceding the date of submieaion.
. . . (gmph~asi6added).

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. InPiper, the SuylremeCourt 

### struck dounarule 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 

### IofnonreSidentS, andwhether the degree or mathod 

### of discrimination bears a close relationship to it8 reason. 105 S.Ct. at 1278-79. The Privileges andIpmur~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 appllcations 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. 1590Privileges aad Ismunitids Clsuse 

### because **of** the ovecvhetlng fsct



### that, in prscticc, the tax f4:l.l

# l xcluolvely oa nonresidents. We

### take notice of 

### the fact 

### that similr~r considerations apply here. 

### ‘-.v.r .Bob C. Bradley - Page 3, gJn-348)

_



### Accordingly , we concluile that 

### Substantive Rule 511.21 cannot stand under the Privileges and 

### Imunities Clause 

### of article IV. section 2unless the board cm demonstrate 

### that there is asubstantial reason 

### for the difference lo trestment and that 

### the discrimination practiced 

### against nonresidwts bears a substantial relationship to that reason. Youhave 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 -- 

### howa 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 12of the Public Accountancy 

### Actof 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 inPiper do 

### not reach this restriction ODforeign nationals because Piper dealt only with the Privileges and Immunities Clause of srtlcle IV, section 2, which expressly applies only to persons 

### whoare “citizens” of s state. See In re Johnson’s E:state, 73 P. 424, 426 (Cal. 1903). You VP 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 maynot impose burdens 

### on lavfullv sdmittctl aliens which are not contemplated by *Congress); Plper v.- extends 

### to ; Do?, 457 U.S. 202 (1982) (Equal Protection Clause Board of Engine&s, s rege.Idless of citizenship); see also Examining Architects, and Surveyors v. Plores de Otero, 426 U.S. 

### 572, 602-605 (1976); De?anas v. Bica, 424 U.S. 351 (1976); Znre Griffiths; 413 U.S. 717y?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 Substantive Rule 511.21, requiring applicants to furnish 

### character references 

### from Texas residents.

__ cannot stand under 

### the Privileges mu Inmmltles

p. 1591Mr. BobC. Brsdley - Paga b (Jkl-348)

Clause 

### of article 1:V. 

### l eetion 2 of **the** United **States** Constitution unless 

### the board can demnstrate that there LIBa 

### l ubetantlal 

### reason for diecriminating against nonresidents by requiring that character refe:rences be furnished by Texer residents 

### and **that** the discrimination prreticed bears asubstantial wlationship to

### that reason.

JIU MATTOX Attorney General of Texas TOMGRER'N First Assistant Attorney General DAVIDR. RICRARDS Executive Assistsnt Attorney General ROBERTGRAY Special Assistant Attorney Ger.eral RICRGILPIN Chairman, Opinion Committee Prepared by Jennifer Riggs Assistant Attorney General APPROVED: OPINION

## COMMITTEE Rick Gilpin, 

### Chairwm Tony Guilloxy JimMoellinger Jennifer Riggs 

## NancySutton Sarah Uoelk

p. 1592