Brief ⁽¹⁾

HB 2938 allows the Board of Accountancy to implement a program of substantial equivalency that will permit Certified Public Accountants from out-of-state to practice accountancy in Kansas and Accountants within the State of Kansas to practice in other states.

The bill does the following:

Section 1

Defines terms used in the act. The term "good moral character" is defined as a lack of a history of professional dishonesty.

Section 2

Enacts a program of substantial equivalency for persons practicing certified public accountancy out of state to practice certified public accountancy in Kansas. Individuals seeking to practice would have to complete a notification form, pay a fee and comply with the Board's rules and regulations.

Section 3

Cleans up KSA 1-201 by removing references to a member of the Board of Accountancy being a Licensed Municipal Public Accountant.

Section 4

Details the duties of the Board of Accountancy and lists the rules and regulations that the Board may adopt, amend, or revoke in enforcing the act.

Section 5

Technical cleanup

Section 6

Authorizes the Board to collect fees for notification or renewal of notification from licensed accountants seeking substantial equivalency in Kansas. The fee could not exceed $150. The bill also would establish an annual $50 registration fee for Kansas CPA firms.

Section 7

Adds the qualification of "good moral character" to the list of qualifications for a Kansas certificate to be issued. A candidate denied a certificate would be able to hearing pursuant to the Kansas Administrative Procedures Act.

Section 8

Removes the educational requirements for admission to the CPA examination prior to June 30, 1997, and sets out new educational requirements.

Section 9

Amends the experience requirements necessary for an applicant to obtain a Kansas permit to practice accountancy. These requirements would be set by professional standards adopted by the Board's rules and regulations. Under this section, any individual who meets the requirements but is denied a certificate and permit to practice must have a due process hearing under the Kansas Administrative Procedure Act.

Section 10

Reduces the requirement from five years to four years for public accountancy experience necessary for a license holder in another state to obtain a reciprocal Kansas certificate if that person does not meet the current experience requirements.

Section 11

Permits non-licensees to become owners in CPA firms registered with the Board under the condition that all non-licencee owners are active participants in activities of the firm and they must be of good moral character. The firm and all of its ownerships would have to comply with the Board's rules and regulations. Under this section, there is a provision for an administrative appeal process for firms.

Section 12

Clarifies that a person may renew a lapsed permit of less than one year by completing a renewal application and submit a fee. If the permit has lapsed for more than one year, then a person can apply for reinstatement by providing evidence of 40 hours of continuing education and the fee.

Section 13

Increases the administrative fines from $1000 to $2000 for certain violations by certificate or permit holders. In addition to a fine, the Board may require the permit holder to complete continuing education programs.

Section 14

Clarifies that a person must hold a valid Kansas permit and a firm must hold a valid registration to practice certified public accountancy in Kansas. Only permit-holding certified public accountants would be able to issue a report on financial statements that reference the American Institute of Certified Public Accountants. Violations of these provisions would have an increased penalty from $500 to $1000.

Section 15

Updates the language that uses a display or utterance in any public communication of a person's name in conjunction with the words "certified public accountant" as the prima facie evidence in any action for injunction.

Section 16

Repealer section.

Section 17

Publication date.

Background

A representative of the Kansas Society of Certified Public Accountants testified in support of the bill. He said the bill would eliminate much of the paperwork currently required of practitioners coming to practice in Kansas and Kansas practitioners seeking entry to practice in other states. A representative of the Public Accountant Association of Kansas testified in support of the bill.

The House Committee on Business, Commerce and Labor made technical amendments to the bill.

The Senate Commerce Committee amended the bill to change the definition of good moral character in section 1 and added the provision for an administrative appeals process for firms in section 11.

The Division of the Budget's fiscal note indicates that the enactment of HB 2938 would make a variety of changes to the Board of Accountancy's fee structure. The fiscal note states that there would be an estimated loss of $11, 800 in revenue for the non issuance of CPA certificates to practitioners whose principal place of business is in another state. In addition, the fiscal note indicates that there would be an additional annual fee of $50 for firm registrations which would generate an estimated revenue of $11, 800 per year. Also, the note states that there would be an increase in revenue from administrative fines , but the amount of revenue cannot be determined at this time. Finally, the note says that there would be no net revenue impact on the agency's fee fund or the State General Fund upon the enactment of HB 2938.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html