States’ deregulatory push threatens CPA licensure

The CPA profession organizes resistance to legislative proposals that would reduce state licensing requirements.
By Sarah Ovaska-Few

CPAs around the United States are raising alarms about a recent wave of deregulatory legislative proposals that are endangering the profession. While these proposals haven’t affected the profession yet, CPA profession leaders warn that the danger is far from over.

In Louisiana this year seven bills were introduced by state lawmakers — including one called the Right to Earn a Living Act — that would have negatively impacted established policies of multiple occupational licensing boards, including the State Board of Certified Public Accountants.

When Ron Gitz, CPA, CGMA, the executive director of the Society of Louisiana Certified Public Accountants, informed the LCPA’s membership that the profession was at grave risk in the state, CPAs across the state jumped into action by emailing, calling, and visiting their lawmakers.

“Talk about loud voices,” Gitz said about the uproar once CPAs realized what was happening.

Making the push more impressive is that several key points in the months-long fight fell in March and April, smack in the middle of the busy tax season.

Louisiana CPAs aren’t alone in their struggle. Twenty-three other state legislative bodies considered similar deregulation efforts in 2018, said Skip Braziel, the AICPA’s vice president–State Regulatory & Legislative Affairs.

It’s not that CPAs are being singled out. Instead, they’re being swept up in a larger political push to reduce state licensing requirements.

“The bills are written so broadly to bring us into the bills; that’s why we’ve been engaged,” Braziel said.

In Louisiana, the legislature eventually clocked out of its regular session in mid-May without taking action on the deregulation. The fight was exhausting, Gitz said, and it’s likely to come back.

“It was battle, battle, battle to the very end,” he said.

Behind the push

The push to eliminate or loosen occupational licensing requirements is coming from both ends of the political spectrum.

Proposals to reduce professional licensing requirements are part of an ongoing debate about limiting government’s reach, Braziel said. Conservative-learning groups like the American Legislative Exchange Council have developed sample bills, versions of which have popped up in legislatures around the country.

On the left, there’s a push from groups like the National Employment Law Project to lower the barriers that licensing requirements may pose to those with criminal records, Braziel said.

The result is bipartisan support in many areas.

Many bills have called for state regulatory boards to be reviewed, and to do their work in the least restrictive way possible, said John Johnson, the director of legislative and governmental affairs at the National Association of State Boards of Accountancy (NASBA). NASBA has worked closely with the AICPA in pushing back on deregulation bills.

A major consequence of these bills would be the threat they pose to CPA mobility, uniformity, and reciprocity. The profession has worked for years to establish the ability for CPA licensees to gain practice privileges to serve clients and employers outside of their home state without getting an additional license.

“This recent wave of anti-regulatory activity threatens to undermine and, in some cases, eliminate these accomplishments by stripping these efficiencies for interstate practice,” Johnson said, adding that it could restrict the ability of state boards to protect the public.

Fighting these bills across the country has been difficult, Braziel said. Bill authors, when asked, will privately acknowledge they didn’t intend to loop in highly educated professions such as CPAs. But they don’t always want to carve out an exemption for accountants for fear other professions will ask for the same treatment.

There are also frustrations with the way some professional boards have acted, as was the case in North Carolina when the state’s dental board tried to shut down teeth-whitening businesses.

A lawsuit over teeth whitening made it all the way to the U.S. Supreme Court, which decided in N.C. Board of Dental Examiners v. Federal Trade Commission that state regulatory boards could face antitrust penalties if they inappropriately stifled competing businesses.

That case has spurred several states to consider whether various licensing boards are overstepping their bounds.

“You had this case open the door for an even broader review of what are these boards doing,” Braziel said. “Do we really need all these occupations and professionals regulated through licenses?”

How to push back

CPAs around the country should be aware of what’s happening — and be prepared for such bills to arise in their state if they haven’t already, Johnson said.

The AICPA has helped state CPA societies develop strategies for pushing back against worrisome legislation. “We try to provide some perspective on what’s happening in other states,” Braziel said. “They’re seeing the same bills pop up across the country.”

The best thing CPAs can do to fight these bills is to stay in close contact with their state’s professional CPA association, Gitz said. The LCPA has depended heavily on its members to carry the message to lawmakers that aggressively altering, restricting, or eliminating existing policies of the state licensing board would be detrimental to the profession.

Braziel agreed and said that actions such as participating in state CPA societies’ annual lobby days at their state legislatures will give opportunities to explain more about the profession and show lawmakers that CPAs are concerned about deregulation.

But those in states that have already seen legislation introduced should be ready for the fight to continue.

“Stay vigilant because it’s coming back,” Braziel said. “This is not an issue that’s going to go away anytime soon.”

Sarah Ovaska-Few is a freelance writer based in North Carolina. To comment on this article or to suggest an idea for another article, contact Chris Baysden, a JofA associate director, at Chris.Baysden@aicpa-cima.com.

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