What Happened During the 2007 Legislative Session?

Bills Relating to Accountancy

HB 91, HD1 and SB 1010, SD1
“Experience / CPA Exam"

Removes equivalent experience – private or governmental accounting – as meeting the required professional experience for a license; AND
Removes examination requirement that baccalaureate degree be in Accounting

HB 939 and SB 980
“Mobility / Practice Privilege”

Allows out-of-state certified public accountants to practice accountancy in Hawaii.


Legislation Introduced

Support of HB 91 / SB 1010 – The proponents of this bill testified that the current experience requirement provision in the law which allows equivalent experience in private or governmental accounting as meeting the required professional experience for licensure is “a disaster waiting to happen – another Pearl Harbor or 9-11”, thereby, proposing legislation to prevent this.

Opposition to HB 91 / SB 1010 – The HSCPA Board of Directors, Board of Public Accountancy, Department of Taxation, Office of the Auditor, accounting students and faculty all provided testimonies in opposition.

CPA firms, corporations in industry, financial institutions, non-profit organizations, and many small businesses are aggressively seeking to hire qualified accountants to serve a business world that is growing more complex every day. CPAs fulfill that role. With the majority in the profession today being baby boomers, there is a need to groom the next generation of CPAs to continue the legacy of the accounting profession. To do this choices and opportunities need to be provided for Hawaii’s best and brightest to pursue a career in Accounting – 360 degrees of possibilities – and at home in Hawaii.

Support of HB 939 / SB 980 – The HSCPA Board of Directors supported the concept of mobility to allow properly licensed CPAs to serve clients across state lines. In today’s dynamic business world of increased globalization, business does not limit services to geographic boundaries, and neither should the CPAs that serve them. The proposed legislation would resolve a dilemma facing accountants throughout the country (including Hawaii) and improve the existing law in Hawaii. This would have added public protection by including the CPA’s own principal-state-of-business licensing provisions combined with the CPA’s automatic consent to jurisdiction when practicing outside of his/her state of licensure.

Opposition to HB 939 / SB 980 – Opponents testified that this would open the flood gates and allow less qualified and foreign CPAs to practice in Hawaii.

The fact remains: CPAs are currently practicing across state lines and will continue to do so as the market evolves. We cannot control market forces in the national economy; we can only try to improve our process for dealing with those forces.


The Process

HOUSE ACTIONS (MOVEMENT OF BILLS)

February 12 HB 939 public hearing before the House Commerce and Consumer Protection (CPC) Committee; bill did not advance from Committee

February 12 HB 91 public hearing before the House Commerce and Consumer Protection (CPC) Committee

February 28 HB 91 passes House CPC with amendments (7 in support; 5 opposed, 3 excused)

March 1 HB 91, HD1 passes full House 3rd reading (35 in support; 14 opposed; 2 excused)

March 1 HB 91, HD1 crosses over to Senate

March 29 SB 1010, SD1 public hearing before the House CPC

April 2 SB 1010, SD1 passes House CPC (7 in support; 1 with reservations; 7 opposed; 1 excused)

April 4 SB 1010, SD1 goes to full House for 3rd reading

April 5 SB 1010, SD1 fails (23 in support; 24 opposed; 4 excused)


SENATE ACTIONS (MOVEMENT OF BILLS)

January 19 SB 980 introduced; bill did not advance from Committee

February 21 SB 1010 public hearing before the Senate Commerce, Consumer Protection and Affordable Housing (CPH) Committee

February 21 SB 1010 passes Senate CPH with amendments (3 in support; 1 opposed; 2 excused)

March 6 SB 1010, SD1 passes full Senate 3rd reading (20 in support; 1 with reservations; 4 opposed)

March 6 SB 1010, SD1 crosses over to the House

April 20 HB 91, HD1 public hearing before Senate CPH

April 20 HB 91, HD passes Senate CPH (2 in support; 2 with reservations; 2 opposed)

April 25 HB 91, HD1 goes to full Senate for 3rd reading

April 26 HB 91, HD1 passes (13 in support; 1 with reservations; 10 opposed; 1 excused)


As of June 25th, HB 91, HD1 has been transmitted to the Governor and is listed on her intention list to veto.

Public Hearings

The HSCPA, Board of Public Accountancy, Department of Taxation, Office of the Auditor, and accounting students provided factual and consistent verbal and written testimonies in opposition to HB 91, HD1 and SB 1010, SD1.

Despite opposition to these bills by an overwhelming majority of the accounting profession, HB 91, HD1 managed to survive through the Senate.

The testimonies provided by the proponents shifted its focus mid-stream to the Board of Public Accountancy’s licensing approval processes. The “evidence” presented represented only part of the story for each case presented – and the rest was not disclosed publicly.

What Happens Next?

If HB 91, HD1 is not vetoed by the Governor or rescinding legislation is not passed prior to the effective date of June 30, 2010, a candidate need NOT take accounting courses to sit for the CPA exam . . . anyone with any degree will be able to take the CPA exam and equivalent experience obtained at the IRS, the Hawaii Department of Taxation, the State Auditor’s Office, private industry, or even the SEC will not qualify as the required professional experience for licensure – only experience at a CPA firm will count toward the experience requirement.

As to mobility, HB 939 did not get very far, but similar bills can be introduced in future sessions.

Any Questions?

If you have any questions or concerns, please contact the HSCPA office at (808) 537-9475 or e-mail info@hscpa.org. It is our policy that your questions and identity remain confidential.