Key Takeaways

  • A Minnesota bill aimed at creatingan alternative path to CPA licensure(without requiring an additional 30 college credits beyond a bachelor's degree) received strong support Tuesday during a hearing before the House State and Local Government Finance and Policy Committee. At the conclusion of the hearing, the bill (HF 1458) advanced to the House Ways and Means Committee.
  • The hearing followed one last Friday before the Minnesota Senate State and Local Government Committee onthe companion bill, SF 1536. According to Corey Butler, communications manager for the Minnesota Society of CPAs, that companion bill is now expected to be included in a larger omnibus bill. Although the legislation is advancing, Butler said final legislation may not be completed until mid-May.
  • On Tuesday,supporters testified at the hearingthat the bill is a step toward addressing the state's shortage of accountants, and notably, the committee heard no opposition, a contrast to the resistance a similar proposal faced last year. "Since then, national organizations have come on board and shifted their positions," Republican state Rep. Scott Van Binsbergen, who authored the bill, told the committee.

Deeper Dive

Minnesota was one of the first states to push for changes to CPA licensure requirements in 2023. That move quickly drew opposition from the American Institute of CPAs (AICPA), which said lowering education requirements would threaten the ability of Minnesota CPAs to practice across state lines and give the "Land of 10,000 Lakes" the most "restrictive" license not equivalent to those of other states.license。

But now, nationwidemomentum is building behind the initiative, and the AICPA and the National Association of State Boards of Accountancy (NASBA) have largely shifted to support. Van Binsbergen told the committee Tuesday that three states this year —Ohio, Virginia, and Utah — have passedalternative path legislation, with more than 20 other states having similar legislation pending. He also noted the bill would allow CPAs holding valid licenses in good standing in other states to serve Minnesota residents. "It would operate similarly to how driver's licenses work across state lines," he said.

On Tuesday, several people from academia, the accounting profession, and state government testified in support of the bill. Many described the challenges they face in finding CPAs to perform audits and other reports.

Small cities are feeling those difficulties most acutely, Cap O'Rouke, executive director of the Minnesota Association of Small Cities, told the committee, calling them the "canary in the coal mine" highlighting the harm caused by the CPA shortage.

"Some of our cities are not only seeing significant increases in audit costs, but frankly, many cities are issuing requests for proposals (RFPs) for audits and getting no responses at all," O'Rouke said. "There are too many people leaving the profession right now, and it's having a major impact on small cities across the state."