SB1470 SD1

SECTION 1. The legislature finds that under existing law, out-of-state certified public accountants are permitted to practice in Hawaii under a temporary permit to practice. However, amendments to this permit to practice process are needed.

Accordingly, the purpose of this Act is to:

(1) Specify who may be granted a temporary permit to practice public accountancy;

(2) Specify requirements that must be met prior to obtaining a temporary permit to practice or commencing public accountancy services in Hawaii;

(3) Specify additional requirements for persons granted a temporary permit to practice; and

(4) Clarify requirements for inactive or retired persons licensed as certified public accountants but who do not have a permit to practice.

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

"§466- Temporary permits to practice. (a) The board may grant a temporary permit to persons who wish to engage in the practice of public accountancy for a limited period of time in this State. The temporary permit to practice granted pursuant to this section shall be limited to attest or litigation support services.

(b) The temporary permit to practice may be granted to any person who:

(1) Has attained eighteen years of age;

(2) Is a United States citizen, a United States national, or an alien authorized to work in the United States;

(3) Possesses a history of competence, trustworthiness, and fair dealing;

(4) Holds a valid license of certified public accountant issued under the laws of another state or United States jurisdiction;

(5) Incidental to the person's practice in such other state or jurisdiction, desires to practice public accountancy in this State on a temporary, and not a permanent or recurring, basis; and

(6) Has completed an application in a form and method prescribed by the board and paid any applicable fees for a temporary permit to practice.

(c) No person shall commence public accountancy services in this State on a temporary basis without first obtaining a temporary permit to practice under this section.

(d) A temporary permit to practice issued under this section shall be effective for a period not exceeding one hundred twenty cumulative days in any calendar year period, unless otherwise extended at the discretion of the board for complicated attest or litigation support services, and shall specify the nature and extent of the practice so permitted. A temporary permit to practice issued pursuant to this section may be renewed in a subsequent calendar year. More than three requests for temporary permits to practice within three calendar years shall be prima facie evidence that the individual is engaged in the practice of public accountancy in this State and a permit issued under section 466-7 shall be required.

(e) A licensee of another state or jurisdiction who obtains a temporary permit to practice shall consent and certify to:

(1) The personal and subject matter jurisdiction and disciplinary authority of the board;

(2) Comply with this chapter and the rules adopted by the board;

(3) Cease to offer or render professional services in this State as an individual and on behalf of the licensee's accountancy firm if:

(A) The license from the state of the licensee's principal place of business is no longer current and active; or

(B) The licensee's practice has been limited or conditioned in any jurisdiction, including the licensee's principal place of business;

(4) Notify the board within fifteen days if:

(A) Any disciplinary action relating to the individual's license is commenced in any state, jurisdiction, or proceeding by the board against the licensee; or

(B) The licensee is convicted of any criminal offense in any state, jurisdiction, or country;

(5) Not to assume, use a title or designation, or use any other title, designation, words, letters, sign, card, or device that would tend to indicate that the person is a certified public accountant licensed in this State or public accountant licensed in this State;

(6) Provide the name and general excise tax license number of the licensee's Hawaii certified public accountancy firm and pay the related state income tax and any other applicable taxes associated with the practice of public accountancy in this State; and

(7) Pay all costs associated with any out-of-state investigation, enforcement, and collection efforts associated with the temporary permit to practice granted under this section, as may be ordered by the board."

SECTION 3. Section 466-3, Hawaii Revised Statutes, is amended by adding two new definitions to be appropriately inserted and to read as follows:

""Principal place of business" means the office location designated by a licensee for purposes of a temporary permit to practice issued under section 466- .

"Temporary permit to practice" means a permit to practice public accountancy for a limited period of time in this State issued under section 466- ."

SECTION 4. Section 466-7, Hawaii Revised Statutes, is amended to read as follows:

"§466-7 Permits to practice. (a) A license and permit are required to actively engage in the practice of public accountancy. The board may grant or renew a permit to actively engage in the practice of public accountancy. Permits shall be initially issued and renewed for periods of two years but in any event shall expire on December 31 of every odd-numbered year. The board shall prescribe the methods and requirements for application.

(b) An applicant for the initial issuance or renewal of a permit shall have:

(1) A valid license;

(2) Completed continuing professional education hours, the content of which shall be specified by the board which may provide for special consideration by the board to applicants for permit renewal when, in the judgment of the board, full compliance with all requirements of continuing education cannot reasonably be met;

(3) Completed an application;

(4) Paid appropriate fees and assessments; and

(5) In the case of a renewal, undergone and provided proof of having undergone the peer review process pursuant to part II.

[~~(c) The board may grant a temporary permit to actively engage in the practice of public accountancy to any person who:~~

~~(1)~~ ~~Has attained eighteen years of age;~~

~~(2)~~ ~~Possesses a history of competence, trustworthiness, and fair dealing;~~

~~(3)~~ Holds a valid license of certified public accountant or of public accountant issued under the laws of another state, or who holds a valid comparable certificate, registration, or license or degree from a foreign country determined by the board to be a recognized qualification for the practice of public accountancy in such other country;

~~(4)~~ ~~Incidental to the person's practice in such other state or country, desires to practice public accountancy in this State on a temporary basis; and~~

~~(5)~~ ~~Has completed an application.~~

~~Such permit shall be effective for a period not exceeding three months, and shall specify the nature and extent of the practice so permitted.~~

~~(d)~~] (c) All firms shall obtain a permit to practice. The board may issue or renew a permit to actively engage in the practice of public accountancy to any firm which submits a completed application and demonstrates qualifications as prescribed by the board.

[~~(e)~~] (d) Failure to submit the required fees, continuing education hours, or other requirements for renewal as specified in this section by December 31 of every odd-numbered year, shall constitute forfeiture of the permit. Continued performance in the practice of public accountancy without a permit shall constitute unlicensed activity and the individual or firm shall be subject to sections 466-9, 466-11, 487-13, and 26-9.

[~~(f)~~] (e) The board may restore forfeited permits to the individual or firm [~~which~~] that satisfies the following:

(1) The requirements of subsection (a), (b), or (c)[~~, or (d) of this section~~]; and

(2) Payment of required fees."

SECTION 5. Section 466-8, Hawaii Revised Statutes, is amended by amending subsections (d) and (e) to read as follows:

"(d) An application for the issuance of a biennial permit to practice for an individual or firm under section 466-7(a) and [~~(d)~~] (c) shall be accompanied by the application and permit to practice fees.

(e) An application for the issuance of a temporary permit to practice under section [~~466-7(c)~~] 466- shall be accompanied by the application and temporary permit to practice fees."

SECTION 6. Section 466-10, Hawaii Revised Statutes, is amended to read as follows:

(d) Nothing contained in this chapter shall prohibit any person:

(1) Who holds a current license of certified public accountant issued under this chapter from assuming and using the title and designation "certified public accountant" or "CPA"; provided that if the person does not also hold a current permit to practice issued under this chapter, the person shall clearly indicate in assuming and using said title that the person does not hold the person's self out to be in the practice of public accountancy; provided further that if the person is inactive or retired, the person shall clearly indicate in assuming and using said title that the person does not hold the person's self out to be in the practice of public accountancy, by indicating "inactive" or "retired" after the person's CPA credential for those that do not have a permit to practice;

(2) Who holds a current license of public accountant issued under this chapter from assuming and using the title and designation "public accountant" or "PA"; provided that if the person does not also hold a current permit to practice issued under this chapter, the person shall clearly indicate in assuming and using the title that the person does not hold the person's self out to be in the practice of public accountancy;

(3) Who holds a temporary [~~practice~~] permit to practice issued under [~~this chapter~~] section 466- from using the title and designation under which the person is generally known in the state or [~~country~~] jurisdiction from which the person received a valid comparable certificate, registration, or license for the practice of public accountancy;

(4) Who is not a certified public accountant or public accountant from serving as an employee of, or an assistant to, a certified public accountant or public accountant; provided that the employee or assistant works under the control and supervision of a person who holds a current license of certified public accountant or of public accountant and a current permit to practice issued under this chapter; and provided further that the employee or assistant does not issue any statement or report over the person's name except office reports to the person's employer as are customary, and that the employee or assistant is not in any manner held out to the public as a certified public accountant or public accountant;

(5) Who is an officer, employee, partner, or principal of any organization from signing or affixing the person's name to any statement or report in reference to the affairs of that organization; provided that in so signing or affixing the person's name the person shall clearly indicate that the person is an officer, employee, partner, or principal of the organization, and the position, title, or office which the person holds therein;

(6) Who is a public official or public employee from the performance of the person's duties as such; or

(7) Who is an attorney at law from engaging in practice as such."

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect on January 1, 2020.

THE SENATE	S.B. NO.	1470
THIRTIETH LEGISLATURE, 2019		S.D. 1
STATE OF HAWAII