Semi-independence expands to include Texas Finance Commission

Several years ago TSCPA supported legislation that made the Texas State Board of Public Accountancy (TSBPA) a semi-independent, self-directed (SDSI) state agency along with the architectural and engineering boards.  The three agencies were part of a pilot project which is scheduled to sunset in 2013 if not renewed by the legislature.  SDSI agencies do not have to submit their budgets to the legislature for approval each biennium.  Their budget funds do not come from taxes, but from the license and exam fees paid by the licensees.  For this privilege the TSBPA must pay over $700,000 annually into the state’s general revenue fund.  That’s because before SDSI the legislature appropriated a budget less than proposed license fees; a common practice for licensing agencies resulting in a hidden state tax.


The main reason TSBPA wanted this budget freedom was to have sufficient funds for effective enforcement actions against wayward CPAs.  Major cases, such as those caused by Enron, require substantial resources to prosecute.  With SDSI TSBPA has the ability to raise or lower license fees as necessary to generate funds quicker than is possible through the legislative appropriations process.  Since SDSI TSBPA has raised fees to generate funds and then lowered them on more than one occasion when the funds were not needed.


The pilot program must be doing well because during the recent legislative session the state’s Finance Commission was awarded SDSI status.  Evidently the current financial crises demonstrated that the state’s financial regulators needed more flexibility in order to deal effectively with regulated financial institutions.  And they don’t even have to make a contribution to the general revenue fund.  Read this Fort Worth Star-Telegram article for more information about SDSI and how it applies to the Finance Commission.

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