HB 983: Board of Public Accountancy; Qualifications; Licensure; Certified Public Accountants; Practice of Public Accountancy: Professional Experience

A BILL FOR AN ACT

RELATING TO CERTIFIED PUBLIC ACCOUNTANTS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that business and commerce continue to grow more complicated, increasing the need for well-qualified certified public accountants in the State and nationwide.  At the same time, however, a declining percentage of students in accounting classes are pursuing certified public accountant licenses.  In part, this decline is due to the requirement of thirty additional semester hours of education, beyond the requirements of a bachelor's degree, to obtain a certified public accountant license.  The time and monetary costs of this additional education can be a serious obstacle for many students.  Thus, the additional education requirement effectively blocks many potential candidates from obtaining licenses, at a time when more qualified certified public accountants are needed.

     The purpose of this Act is to generate more qualified certified public accountants by establishing alternative pathways to licensure that eliminate certain barriers for eligible applicants.

     SECTION 2.  Section 466-5, Hawaii Revised Statutes, is amended by amending subsections (a) through (d) to read as follows:

     "(a)  A license and a permit [are] shall be required to practice public accountancy.  The board may license and grant the designation of "certified public accountant" to any person who has met the following:

     (1)  Attained eighteen years of age;

     (2)  Possesses a history of competence, trustworthiness, and fair dealing;

     (3)  Educational requirements of this section [or section 466-5.5];

     (4)  [Experience] Completed two years of professional experience meeting the requirements of subsection (d);

     (5)  Examination requirements of subsection (e); and

     (6)  Paid the appropriate fees and assessments.

     (b)  The educational requirement for a license shall include a baccalaureate degree conferred by a college or university recognized by the board [and:], which shall include at least eighteen semester hours of upper division or graduate level accounting or auditing subjects.  The content of these eighteen hours shall be determined by rules adopted by the board pursuant to chapter 91.  The educational requirement for a license shall also include either:

     (1)  Completion of [not] no less than thirty semester hours of study in addition to those semester hours required for a baccalaureate degree[.  The baccalaureate degree and the thirty semester hours of additional study shall include a minimum of eighteen semester hours of upper division or graduate level accounting or auditing subjects.  The]; provided that the content of the additional qualifying hours of study shall be determined by rules adopted by the board pursuant to chapter 91; or

     (2)  [If the applicant has a minimum of eighteen semester hours of upper division or graduate level accounting and auditing subjects, the applicant may elect to replace the thirty semester hours with an additional thirty months of professional experience in a public accounting practice.  This experience shall not be credited toward the experience requirements in subsection (d).]  Completion of an additional twelve months of professional experience in the practice of public accountancy only.  This professional experience shall be in addition to, and shall not be counted in, any professional experience meeting the requirements of subsection (a)(4).

     (c)  A person shall be exempt from the requirements in subsection (b) [or section 466-5.5] if that person:

     (1)  Holds a current license as a public accountant under section 466-6; or

     (2)  Holds, and has continued to hold, a valid comparable certificate, registration, or license of certified public accountant of another state for a period of not less than ten years preceding the date of the person's application under this section, and has been in active practice of public accountancy in one or more states for a period of not less than five years preceding the date of the application.

     (d)  Each applicant shall present satisfactory evidence in the form of a certified statement, from present or former employer(s), that the applicant has [met one of the following experience requirements for license:

     (1)  Completion of one thousand five hundred chargeable hours in the performance of audits involving the application of generally accepted accounting principles and auditing standards earned while in public accounting practice; or

     (2)  Completion of two years of] completed the required professional experience in the practice of public accountancy [practice] as defined in section 466-3.  Completion of experience in private or government accounting or auditing work, deemed by the board to be equivalent to professional experience in the practice of public accountancy [practice] as defined in section 466-3, may be substituted for all or part of the two years of professional experience in the practice of public [accounting practice.] accountancy required by subsection (a)(4).  The nature, variety, and depth of acceptable private or government accounting or auditing experience shall be defined by the board in its rules."

     SECTION 3.  Section 466-5.5, Hawaii Revised Statutes, is repealed.

     ["§466-5.5  Educational requirements for licensure effective December 31, 2000.  Effective December 31, 2000, an applicant for licensure shall have at least one-hundred-fifty semester hours of college education.  Within the one‑hundred‑fifty semester hours, the applicant shall have:

     (1)  A baccalaureate or higher degree conferred by a college or university acceptable to the board; and

     (2)  An accounting concentration or its equivalent as specified in the rules of the board;

except that applicants for licensure who have successfully completed the Uniform Certified Public Accountant Examination before December 31, 2000, or held conditional credit before December 31, 2000, and subsequently completed the examination before the conditional credit expired, may continue to meet the educational requirements of section 466-5(b)."]

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 3000.

Report Title:

Board of Public Accountancy; Qualifications; Licensure; Certified Public Accountants; Practice of Public Accountancy: Professional Experience

Description:

Establishes an alternative pathway to licensure for certified public accountant license applicants by permitting applicants to demonstrate completion of an additional twelve months of professional experience in the practice of public accountancy or completion of no less than an additional thirty semester hours of study.  Effective 7/1/3000.  (HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

Relating to Certified Public Accountants.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that business and commerce continue to grow more complicated, increasing the need for well-qualified certified public accountants in the State and nationwide.  At the same time, however, a declining percentage of students in accounting classes are pursuing certified public accountant (CPA) licenses.  In part, this decline is due to the requirement of thirty additional semester hours of education, beyond the requirements of a bachelor's degree, to obtain a CPA license.  The time and monetary costs of this additional education can be a serious obstacle for many students.  Thus, the additional education requirement effectively blocks many potential candidates from obtaining CPA licenses, at a time when more qualified CPAs are needed. 

     The purpose of this Act is to generate more qualified CPAs by establishing alternative pathways to licensure that eliminate certain barriers for eligible applicants. 

     SECTION 2.  Section 466-5, Hawaii Revised Statutes, is amended by amending subsections (a) through (d) to read as follows:

     "(a)  A license and a permit are required to practice public accountancy.  The board may license and grant the designation of "certified public accountant" to any person who has met the following:

     (1)  Attained eighteen years of age;

     (2)  Possesses a history of competence, trustworthiness, and fair dealing;

     (3)  Educational requirements of this section [or section 466-5.5];

     (4)  Experience requirements of subsection (d);

     (5)  Examination requirements of subsection (e); and

     (6)  Paid the appropriate fees and assessments.

     (b)  The educational requirement for a license shall include a baccalaureate degree conferred by a college or university recognized by the board and:

     (1)  Completion of not less than thirty semester hours of study in addition to those semester hours required for a baccalaureate degree[.  The baccalaureate degree and the thirty semester hours of additional study shall include a minimum of eighteen semester hours of upper division or graduate level accounting or auditing subjects.  The]; provided that the content of the additional qualifying hours of study shall be determined by rules adopted by the board pursuant to chapter 91; [or] and

     (2)  [If the applicant has a] A minimum of eighteen semester hours of upper division or graduate level accounting and auditing subjects[, the applicant may elect to replace the thirty semester hours with an additional thirty months of professional experience in a public accounting practice.  This experience shall not be credited toward the experience requirements in subsection (d).]; provided that the content of the additional qualifying hours of study shall be determined by rules adopted by the board pursuant to chapter 91.

In lieu of paragraph (1), the applicant may demonstrate completion of twelve months of professional experience in the practice of public accounting, as determined by the board and pursuant to subsection (d); provided that this professional experience shall be in addition to any professional experience required for a license pursuant to this section.

     (c)  A person shall be exempt from the requirements in subsection (b) [or section 466-5.5] if that person:

     (1)  Holds a current license as a public accountant under section 466-6; or

     (2)  Holds, and has continued to hold, a valid comparable certificate, registration, or license of certified public accountant of another state for a period of not less than ten years preceding the date of the person's application under this section, and has been in active practice of public accountancy in one or more states for a period of not less than five years preceding the date of the application.

     (d)  Each applicant shall present satisfactory evidence in the form of a certified statement, from present or former employer(s), that the applicant has [met one of the following experience requirements for license:

     (1)  Completion of one thousand five hundred chargeable hours in the performance of audits involving the application of generally accepted accounting principles and auditing standards earned while in public accounting practice; or

     (2)  Completion of] completed two years of professional experience in public accountancy practice as defined in section 466-3.  Completion of experience in private or government accounting or auditing work, deemed by the board to be equivalent to professional experience in public accountancy practice as defined in section 466-3, may be substituted for all or part of the two years of professional experience in public accounting practice.  The nature, variety, and depth of acceptable private or government accounting or auditing experience shall be defined by the board in its rules."

     SECTION 3.  Section 466-5.5, Hawaii Revised Statutes, is repealed.

     ["§466-5.5  Educational requirements for licensure effective December 31, 2000.  Effective December 31, 2000, an applicant for licensure shall have at least one-hundred-fifty semester hours of college education.  Within the one‑hundred‑fifty semester hours, the applicant shall have:

     (1)  A baccalaureate or higher degree conferred by a college or university acceptable to the board; and

     (2)  An accounting concentration or its equivalent as specified in the rules of the board;

except that applicants for licensure who have successfully completed the Uniform Certified Public Accountant Examination before December 31, 2000, or held conditional credit before December 31, 2000, and subsequently completed the examination before the conditional credit expired, may continue to meet the educational requirements of section 466-5(b)."]

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect upon its approval.

Report Title:

Board of Public Accountancy; Qualifications; Licensure; Certified Public Accountants

Description:

Clarifies the education and professional experience requirements for certified public accountant license applicants to establish alternative pathways to licensure.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO.  808

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 983

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 983 entitled:

"A BILL FOR AN ACT RELATING TO CERTIFIED PUBLIC ACCOUNTANTS,"

begs leave to report as follows:

     The purpose of this measure is to eliminate certain educational barriers for an applicant to be qualified for licensure as a certified public accountant.

     Your Committee received testimony in support of this measure from the Hawaii Society of Certified Public Accountants; Taketa, Iwata, Hara & Associates, LLC; Hawaii Association of Public Accountants; Hawaii Association of Public Accountants – Oahu Chapter; Chantal Mentzer Inc.; and numerous individuals.  Your Committee received comments on this measure from the Board of Public Accountancy and Hong Consulting, LLC.

     Your Committee finds that there is an increasing need for well-qualified certified public accountants in the State and nationwide as business and commerce continue to grow more complicated.  However, there is a declining percentage of students in accounting courses that pursue certified public accountant licenses.  This is in part due to the extensive educational requirements beyond a bachelor's degree for licensure, which require further time and money and can serve as a barrier for many potential candidates for licensure.  This measure opens an alternative pathway for a certified public accountant license by authorizing the completion of qualifying professional experience in the practice of accountancy in lieu of post-baccalaureate coursework.

     Your Committee has amended this measure by:

     (1)  Clarifying that the required minimum of eighteen semester hours of upper division or graduate level accounting or auditing subjects, as determined by rules adopted by the Board of Public Accountancy, are to be completed as part of the candidate's baccalaureate degree;

     (2)  Clarifying that the professional experience that may be substituted for the additional thirty semester hours is twelve months of professional experience in the practice of public accountancy only, which shall be in addition to, and shall not be counted in, the other required professional experience;

     (3)  Changing the effective date to July 1, 3000, to encourage further discussion; and

     (4)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 983, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 983, H.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,