Gov. Cuomo’s New Budget Includes Support for Non-CPA Firm Ownership

By:
Ruth Singleton
Published Date:
Jan 23, 2018


capital

Gov. Andrew Cuomo’s executive budget for fiscal year 2019, released on Jan. 16, includes a proposed bill and statement in support of non-CPA ownership of accounting firms in New York State. The NYSSCPA has, for the last three years, supported previous legislation enabling non-CPA ownership so that New York State-based firms remain competitive as firm structures and hiring practices evolve to include more non-CPAs, in tech and other areas of consultancy.

Cuomo’s statement in support of the bill emphasizes the important contribution non-CPA experts make to accounting firms: “In today’s rapidly evolving economy, accounting firms endeavor to provide a variety of services to their clients and to do so often requires the skills of individuals who are not Certified Public Accountants such as actuaries, industry experts, information technology professionals and valuation specialists.” The statement also stresses the business benefits that would accrue to the state if the non-CPA ownership legislation passed: “By allowing non-CPA professionals to become minority owners of public accounting firms, this bill would modernize New York's incorporation laws and better enable accounting firms in the State to provide the services their clients have come to expect.” Delaware and Hawaii are the only other states in the country that prohibit non-CPA ownership.

The proposed budget bill provision would allow New York public accounting firms with up to 49 percent ownership by individuals who are not CPAs to incorporate in New York state, provided the words “Certified Public Accountant” or the abbreviation “CPA” is excluded from the firm’s name. It is similar to legislation introduced by Sen. Kenneth P. LaValle and Assemblyman Félix W. Ortiz in 2015. That year, both the executive and Senate budget bills included language allowing non-CPA firm ownership, but the executive, Assembly and Senate could not come to an agreement to include in the final joint budget bill.

The text of the governor’s proposed bill appears in the FY 2019 executive budget under the heading “Education, Labor and Family Assistance.” In addition to the provision appearing in Cuomo’s proposed budget, Assemblywoman Crystal Peoples-Stokes introduced stand-alone legislation with virtually identical language, A8973, on Jan. 9 of this year, which was referred to the Assembly’s Higher Education Committee. After a Senate bill died in the Assembly last year, it was returned to the Senate and referred to that chamber’s Higher Education Committee on Jan. 3. The legislative session began on Jan. 3 and runs through June 20, so if the Legislature were to pass the bill this year, it would need to do so by June.

Last year, the Senate bill, sponsored by LaValle, passed the Senate in June, and it was delivered to the Assembly, where it died. The Assembly version, sponsored by Assemblyman Francisco P. Moya, was referred to the Assembly’s Higher Education Committee, where it stalled. There was a similar result in 2016.

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