LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
ASSEMBLY, No. 5598
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: MAY 28, 2025
SUMMARY
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Synopsis: |
Modifies requirements to obtain licensure in public accountancy. |
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Type of Impact: |
Annual State expenditure increases; annual net State revenue impact. |
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Agencies Affected: |
Department of Law and Public Safety. |
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Office of Legislative Services Estimate |
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Annual Fiscal Impact |
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State Expenditure Increase |
Indeterminate |
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Net State Revenue Impact |
Indeterminate |
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· The Office of Legislative Services (OLS) concludes that annual State revenues and expenditures may fluctuate by an indeterminate amount under the bill. The OLS cannot quantify the net fiscal impact of the bill, given a lack of information regarding the: 1) number of new licensees generated from the updated educational requirements for licensure; 2) number of decreased license renewals by licensees currently licensed in multiple states, which may not choose to renew the New Jersey license; and 3) increase in New Jersey expenditures from regulating interstate reciprocal and new licensees.
· The bill clarifies that an applicant for licensure is required to have a baccalaureate or an equivalent degree or complete 150 hours of education, which may increase the number of licensees by an indeterminate amount. Further, the bill provides that out-of-state licensed professionals practicing in New Jersey do not need to seek licensure, notify the board, or pay any fee. Annual State revenues may fluctuate by an indeterminate amount, depending upon the number of new licensees added and the number of currently licensed interstate professional accountants living out-of-state who may choose not to renew their New Jersey license.
· There may be increases in board operating expenses to regulate interstate professional accountants who practice in the State and new licensees as a result of the bill.
BILL DESCRIPTION
This bill updates the means by which an individual may obtain a license in public accountancy from the New Jersey State Board of Accountancy.
Under the bill, an individual is to have at least a baccalaureate or higher degree or its equivalent. The bill further stipulates that an individual is to not be licensed unless they have earned that degree or have successfully completed 150 hours of education. The degree earned or 150 hours of education completed are to be obtained from an institution of higher education accredited by a regional accrediting agency recognized by the Commission on Higher Education. This educational attainment is to demonstrate a concentration in accounting or its equivalent and related professional courses, as determined by the board.
The bill removes “substantial equivalence” as the standard to be met for out-of-State individuals and instead requires comparable standards to be met, among other items, for the individual to receive a New Jersey license. Additionally, the bill removes the need to meet standards established by the National Association of State Boards of Accountancy in order to qualify for licensure as an out-of-State individual. Instead, an individual is to hold a current, valid, and unrevoked license in another U.S. jurisdiction; pass the Uniform Certified Public Accountant Examination or any other examination approved by the board; and have one year of experience as required by current law. The bill further stipulates that an individual who holds a current valid license from another state prior to December 31, 2025, and as of that date, has practice privileges in New Jersey, is allowed to continue having all the privileges of licensed certified public accountants of the State without the need to obtain a license pursuant to the other requirements of current law, to notify the board, or to pay any fee.
Moreover, regarding experience, the bill delineates the individuals who need to have two years of certain experience and one year. Lastly, the bill also updates when examination waivers apply to individuals.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS concludes that annual State revenues and expenditures may fluctuate by an indeterminate amount under the bill. The OLS cannot quantify the net fiscal impact of the bill, given a lack of information regarding the: 1) number of new licensees generated from the updated educational requirements for licensure; 2) number of decreased license renewals by licensees currently licensed in multiple states, which may not choose to renew the New Jersey license; and 3) increase in New Jersey expenditures from regulating interstate reciprocal and new licensees.
Indeterminate Net Impact in State Revenues: Initially, State revenues may fluctuate by an indeterminate amount, depending upon the number of new licensees added and the number of currently licensed interstate professional accountants living out-of-state who may choose not to renew their New Jersey license. The OLS lacks the informational basis to determine the direction and magnitude of the State revenue impact from these two countervailing outcomes.
First, the bill clarifies the education requirements for licensure, which may increase the number of licensees annually by an indeterminate amount. Annual State revenues may increase depending on the number of new licenses issued under the new pathway. These licenses are issued by the New Jersey State Board of Accountancy and fees are set as per N.J.A.C.13:29. The fees for professional accountants are as follows:
New Jersey Division of Consumer Affairs Certified Public Accountant License Fees
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Application Fee |
Initial and Triennial License Fee |
Examination Fee |
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Certified Public Accountants |
$75 |
$135 |
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Public Accountants |
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Accounting firms (including sole proprietorships, partnerships, professional corporations, limited liability companies, or limited liability partnerships) |
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Applicants seeking licensure by waiver of examination based upon licensure in another jurisdiction |
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Registered Municipal Accountants |
N/A |
$225 |
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Pubic School Accountants |
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$75 |
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Entities filing an application to become sponsors of continuing professional education shall pay a fee of $150.00 on a triennial basis for administrative costs and evaluation of programs submitted. |
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Alternatively, the State may realize some decreases in license fee revenues from accountants, currently living out-of-state, who may relinquish their existing New Jersey licenses. The OLS cannot determine with any certainty the number of New Jersey licensed accountants who may choose interstate reciprocity. Currently, New York, Pennsylvania, and Delaware have approved a form of interstate Certified Public Accountant license reciprocity. According to the FY 2026 Governor’s Budget, in FY 2024 there were 24,217 active public accountancy licenses in New Jersey and 29,555 active public accountancy licenses in FY 2023.
Increased State Expenditures: The New Jersey State Board of Accountancy may have increases in annual operating expenses to regulate additional interstate public accountants who practice in the State, as well as new licensees from the updated educational requirements for licensure as a Certified Public Accountant. The Division of Consumer Affairs has not published the number of public accountants residing out-of-state who may practice in the State. As such, the extent to which the board’s operational costs to monitor accountants practicing in the State, and provide other states with information regarding State-licensed public accountants, cannot be determined.
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Section: |
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Analyst: |
Lead Fiscal Analyst |
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Approved: |
Thomas Koenig Legislative Budget and Finance Officer |
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).