SB542.DOC

SECTION 1. The purpose of this Act is to clarify the rules governing practice in this State by firms and individuals licensed to practice public accounting in other states by requiring that all certified public accountants practicing in Hawaii be subject to the disciplinary power of the Hawaii state board of public accountancy.

SECTION 2. Chapter 466, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

"§466-A Practice by certain out-of-state firms. (a) A certified public accountant firm that holds a current, valid license or permit to practice public accountancy in another state, has its primary place of business in that state, and does not maintain an office or division in Hawaii may practice in this State without a firm permit required pursuant to section 466-7(d) and without notice to the board if the firm's practice of public accountancy in Hawaii is performed solely by and through a single individual who holds a permit to practice pursuant to section 466-7, or who is eligible to engage in a limited practice of accountancy under section 466-B.

(b) A firm practicing under this section, as a condition of the privilege of practicing in this State:

(1) Shall be subject to the personal jurisdiction, subject matter jurisdiction, and disciplinary authority of the board;

(2) Shall comply with this chapter and with all applicable rules established by the board; and

(3) Shall be deemed to have appointed the regulatory agency of the state that issued the firm's license as the firm's agent, upon whom process may be served in any action or proceeding by the board against the firm."

§466-B Limited practice by out-of-state practitioner. (a) A person who holds a current, valid license to practice as a certified public accountant issued by another state, maintains a principal residence and principal place of business in that state, and does not maintain an office in Hawaii may practice public accountancy in this State subject to the restrictions and conditions in this section, if:

(1) The National Association of State Boards of Accountancy's National Qualification Appraisal Service has verified that the state in which the person is licensed has education, examination, and experience requirements for certification or licensure that are substantially equivalent to or exceed the requirements for licensure as a certified public accountant under the Uniform Accountancy Act; or

(2) The person obtains from the National Association of State Boards of Accountancy's National Qualification Appraisal Service verification that the person's education, examination, and experience qualifications are comparable to or exceed the requirements of this chapter.

(b) A person who meets the requirements of subsection (a) may practice public accountancy in this State without notice to the board.

(1) Shall be subject to the personal jurisdiction, subject matter jurisdiction, and disciplinary authority of the board;

(2) Shall comply with this chapter and with all applicable rules established by the board; and

(3) Shall be deemed to have appointed the regulatory agency of the state that issued the person's license as the person's agent, upon whom process may be served in any action or proceeding by the board against the person.

(d) A person practicing under this section shall practice through a firm that holds a current valid license under this chapter if the practice of public accountancy performed by the person includes any of the following for an entity with its principal office in this State:

(1) A financial statement audit or other service performed in accordance with the Statements on Auditing Standards issued by the American Institute of Certified Public Accountants;

(2) An examination of prospective financial information performed in accordance with the Statements on Standards of Attestation Engagements issued by the American Institute of Certified Public Accountants; or

(3) Services subject to the auditing standards of the Public Company Accounting Oversight Board or its successor under the Sarbanes-Oxley Act of 2002."

SECTION 3. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	542
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII