Dive Brief:

• A Minnesota bill that would create alternative pathways to CPA licensure that don’t require an additional 30 hours of college credit on top of a bachelor’s degree drew strong support in testimony Tuesday before the state legislature’s House, State and Local Government Finance and Policy Committee. At the close of the hearing, the bill, HF 1458, advanced to the House Ways and Means Committee.  
• The proceeding comes on the heels of a hearing Friday before the Minnesota Senate Committee on State and Local Government on a companion bill, SF 1536, which is now poised for possible inclusion in a larger omnibus bill, according to Corey Butler, communications manager for the Minnesota Society of CPAs. Although the bills are advancing, Butler said final passage of legislation may not occur until mid-May.
• On Tuesday, supporters testified that the bill was a step forward toward addressing the state’s accountant talent shortage and, notably, the committee heard no opposition, a change from the pushback sparked by a similar proposal that stalled last year. “Since then national groups have gotten on board and they’ve shifted their positions,” Republican State Rep. Scott Van Binsbergen, who introduced the legislation, told the committee.

Dive Insight:

Minnesota in 2023 was a pioneer among states as it pushed to change CPA licensure requirements. It quickly sparked opposition from the American Institute of Certified Public Accountants, which said that reducing education requirements would threaten the ability of the state’s CPAs to work across state lines and leave the Land of 10,000 Lakes with the most “restrictive” license that would not be equivalent to that of other states. 

But momentum is now coalescing behind the initiative nationally, with the AICPA and the National Association of State Boards of Accountancy falling in line to generally support the push. This year three states — Ohio, Virginia and Utah — have passed alternative pathways legislation and 20 more have similar legislation pending, Van Binsbergen told the committee Tuesday. He also noted that the bill would allow CPAs licensed and in good standing in other states to serve Minnesotans. “It will operate similar to how a driver’s license works across state lines,” he said. 

A range of people drawn from academia, the accounting industry and state government testified in support of the bill Tuesday. Many described the challenges they and others face finding CPAs to complete audits and other reports.  

Small cities have felt the brunt of the difficulties and are a “canary in the coal mine,” highlighting harm from the CPA shortage, Cap O’Rouke, executive director of the Minnesota Association of Small Cities, told the committee.

“We have cities that have not only seen a significant increase in the cost of audits but frankly we have a number of cities who have put out RFPs for audits that have had no response whatsoever,” O’Rourke said. “Right now the industry is seeing too many people leave and that’s having major effects on our small cities across the state.”