Bill to relax 150-hour rule advances in Minnesota

A bill backed by the Minnesota Society of CPAs that would ease the path to a CPA license has moved forward in the Minnesota Senate.

The bill, known as Senate File 1660, advanced on a voice vote Thursday, moving it from the State and Local Government and Veterans Committee to the Minnesota Senate Finance Committee.

It would offer an additional option to licensure with a bachelor’s degree (120 credits) and two years of work experience, which had been the requirement in Minnesota until nearly 20 years ago. The bill would also maintain the current 150-hour credit rule.

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The MNCPA proposed the bill last year a result of member feedback and support from the MNCPA board of directors, and it was carried over into this year. The original proposal would create three paths to licensure, all of which would require passing the CPA exam, plus:

• 150 credit hours and one year of work experience (the current model);
• 120 credits and two years of work experience; or,
• 120 credits and both one year of work experience and 120 CPE credits, earned concurrently.

The proposal has received pushback from the American Institute of CPA, which sees a threat to the CPA mobility framework that allows CPAs to operate across state borders if individual states start making changes to the CPA licensing laws.

However, several accounting leaders locally and nationally told lawmakers about the impact the legislation could have on the talent pipeline problems facing the profession. 

“There are multiple studies that show that the 150-hour requirement has created barriers for students, especially minority students, to becoming CPAs,” wrote CliftonLarsonAllen CEO Jen Leary in testimony to the Senate committee. “There is no evidence that the 150-hour requirement has improved the quality of the profession. We have the power to change this. Minnesota’s exemplary actions to broaden the pathways and increase accessibility to the accounting profession have the potential to increase the number of CPAs overall and encourage hard-working, diverse talent to join the profession.”

The MNCPA pointed out that many other states already have alternative pathways to licensure in place for CPA candidates, and more states are joining the conversation, including Arizona, Virginia and New Jersey.

“I can tell you from my own experience, through conversations with colleagues throughout the country and the members of the MNCPA, that we have a significant shortage of CPAs,” MNCPA board chair Bob Cedergren told the Senate committee. “The work continues to grow but the supply of CPAs to do the work isn’t keeping up. … We need to move forward. The situation is critical.”

The bipartisan Senate bill was authored by Sen. Jordan Rasmusson, a Republican, and co-signed by Senate Majority Leader Erin Murphy and Sen. Ann Rest and Zaynab Mohamed, all Democrats. 

A companion bill in the Minnesota House, known as House File 1749, has not yet received a hearing date. But CPAs and legislators hope to advance the bill and build the CPA talent pipeline. 

“It’s been our experience that hiring students with 120-credit hours makes absolutely no difference in their performance versus hiring students with 150 credits,” testified Pat Plamann, managing partner at Schlenner, Wenner & Co. in St. Cloud. “This bill is the pipeline for the life of our firm.”

Sen. Mark Koran offered Rasmusson his support for the bill eventually being enacted into law.

“Hopefully you’ll get it across the finish line,” he said.