. 

JIM MAlTOX 

4ttorney General 

Su~rrmr Court BulldIng 

P. 0. aor 12549 

4urtin. l-x. 70711.2546 

51214752501 

Telex 9101674-1367 

Tdeco~ier 51214750266 

714 J4ckx.n. Sulie 700 

Dallas. TX. 752024506 

2141742.6944 

4824 Alberta Ave.. Suite 160 

El Paso. TX. 799052793 

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h. has. sw 700 

Hw,,cm, TX. 77002~3111 

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Lubbock. TX. 79401.3479 

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McAllen. TX. 76501.1665 

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San Antonio. TX. 762052797 

512l2254191 

The Attorney General of Texas 

hgcat 28, 1985 

Mr. Bob E. Bradley 

Executive Director 

Texas State Board of 

Public Accountancy 

1033 La Posada. 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 

from Texas residents 

Dear Mr. Bradley: 

On behalf 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 a certified public 

accountant In Texas s,hall he a person 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). 

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 rubmittins to the boar’1 the initial epplicati( m to 

take the kitten cxamititioti~ Gnductld byboard 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 submieaion. . . . (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 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 restriction. 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 
Privileges 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 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, 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 may not 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); 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 Substantive 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. l eetion 2 of the United 

States Constitution unless the board can demnstrate that there LIB a l ubetantlal 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