Minnesota committee advances bill to reform CPA licensure requirements and address shortages

The Minnesota Legislature's Committee on State and Local Government convened on March 14, 2025, to address the pressing issue of a certified public accountant (CPA) shortage in the state. This shortage has been particularly felt by nonprofits, small cities, and townships, which struggle to find qualified CPAs to meet their community needs.

Senator Rasmussen highlighted that current state law requires aspiring CPAs to complete five years of college or 150 credit hours before sitting for the CPA exam. This requirement has been linked to a significant decline in students pursuing CPA careers, with a 15% drop noted, particularly affecting those from economically disadvantaged backgrounds. The senator proposed a bill aimed at creating alternative pathways to CPA licensure, which has garnered support from various accounting associations and reflects a growing trend in other states.

The proposed bill would allow two new pathways: one would require an accounting bachelor's degree along with two years of general work experience, while the other would necessitate a master's degree in accounting with one year of work experience. The existing requirement would remain in place for currently enrolled students until it sunsets in 2030. Importantly, all candidates must still pass the CPA exam.

Additionally, the bill seeks to enhance mobility for CPAs licensed in other states, allowing them to serve clients in Minnesota while adhering to local laws. This change aims to improve access to CPAs, especially in border communities. The licensing authority would also shift from the National Association of State Boards of Accountancy (NASBA) to the Minnesota Board of Accountancy, streamlining the process similar to how driver's licenses are managed across states.

Support for the bill was echoed by Kap O'Rourke, executive director of the Minnesota Association of Small Cities, who noted the increasing costs and difficulties small communities face in securing auditing services. Boz Bostrom, chair of the Minnesota Society of CPAs, also expressed support, emphasizing the importance of addressing the CPA shortage for the benefit of various sectors, including individuals, businesses, and government agencies.

The committee's discussions reflect a critical step towards alleviating the CPA shortage in Minnesota, with potential implications for local governance and community services. Further deliberations and testimonies are expected as the bill progresses through the legislative process.