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Gov. Hochul Signs Non-CPA Ownership Bill into Law

Ruth Singleton
Published Date:
Dec 11, 2023

iStock-532047444 New York State Capitol Albany 240x240

After 11 years of lobbying in Albany to allow non-CPAs to become minority partners at CPA firms, the NYSSCPA achieved success late in the evening of Dec. 8, when Gov. Kathy Hochul signed a non-CPA ownership bill into law. The legislation, A.4189 (Peoples-Stokes)/ S.2473A (Stavisky), had passed the New York State Senate on May 22, by a vote of 59-2, and the New York State Assembly on May 30, by a vote of 144-0.  

The legislation will not take effect immediately, in order to give the New York State Education Department the opportunity to issue regulations.

In a Dec. 9 letter to members NYSSCPA CEO Calvin Harris Jr., said, “Moments ago, Governor Kathy Hochul signed the Non-CPA Firm Ownership bill into law. This is a priority that the Society through its Legislative Task Force and Political Action Committee has been working on for more than 11 years. We are proud to say that all the hard work by members like you has paid off and that we have won today!”

The governor’s signing memorandum states, “This bill would allow public accounting firms with minority ownership by individuals who are not certified public accountants to incorporate in New York State. Similar laws already exist in forty-eight other states. 

“I proposed substantially similar legislation in my last two Executive Budget proposals, and I support the goals of this legislation. By allowing professionals who are not certified public accountants to become minority owners of accounting firms, this bill will modernize New York's incorporation laws, allow New York accounting firms to remain competitive, and increase the availability of advancement options to a diverse group of employees. However, certain administrative changes to the effective date were necessary to allow the State Education Department sufficient time to make the changes necessary for full implementation. 

“I have reached an agreement with the Legislature to enact these changes. On the basis of this agreement, I am pleased to sign this bill.”

The legislation provides, in part, "Any firm established for the business purpose of incorporating as a professional service corporation formed to lawfully engage in the practice of public accountancy, as such practice is defined under Article 149 of the Education Law shall be required to show (1) that a simple majority of the ownership of the firm, in terms of financial interests and voting rights held by the firm's owners, belongs to individuals licensed to practice public accountancy in some state. ..."

The Society has long supported this legislation for several reasons. As CPA client work becomes more complex, non-CPA professionals are increasingly vital to performing high-quality client work. Without being able to become partners, IT professionals, policy experts, data analysts and others reached a professional ceiling due to the fact that firms were unable to offer any long-term incentive and growth opportunity. These valued employees often moved to neighboring states, where the opportunities they were looking for were available. Now, with the passage of the bill, the Society believes that expanding opportunities for ownership in New York state will level the playing field, provide increased job opportunities and strengthen the economy.   

The Society thanks its senior leaders who lobbied for the bill, along the volunteers, particularly its Legislative Task Force and Political Action Committee, who have worked to push through this critical legislation.

Click here to see more of the latest news from the NYSSCPA.