Federal Issues

    Municipal Advisors 

    The AICPA generally supports the Securities and Exchange Commission’s Proposed Rules as a means to strengthen investor protections in the municipal securities market.  The AICPA also believes that the establishment of a permanent registration regime with the SEC for municipal advisors, including the imposition of certain record-keeping requirements, will further the goals of accountability and transparency in the financial system.  The Institute is concerned, however, that the broad definition in the Proposed Rules of “municipal advisor” will encompass accountants who are performing “customary and usual” services incidental to, or inextricably linked to, the practice of accountancy and should not be subject to required registration.


    Section 975 of the Dodd-Frank Act amended Section 15B of the Securities Exchange Act of 1934 to, among other things, make it unlawful for municipal advisors to provide certain advice to, or solicit, municipal entities or certain other persons without registering with the SEC. The SEC believes that the preparation and audit of financial statements or the issuance of letters for underwriters by accountants would not constitute the provision of advice within the meaning of the Exchange Act.   Accordingly, in its rulemaking, the SEC proposes to exclude from the definition of a “municipal advisor” accountants preparing financial statements, auditing financial statements, or issuing letters for underwriters for, or on behalf of, a municipal entity or obligated person.

    The AICPA also believes that requiring registration for accounting services was not the intended result of the Dodd-Frank Act.   There is already substantial and appropriate regulation of the accounting profession at the state and federal level.  Therefore, in its comment letter on the SEC’s proposed rule, the AICPA recommended that accountants performing customary and usual accounting services, including accounting, tax, advisory, or other services, including audit and attestation services, where those services are subject to the regulatory authority of a State Board of accountancy or a Federal authority, be exempted from the requirements.

    Regulatory Action

    The SEC proposed new rules 15Ba1-1 through 15Ba1-7and related forms under the Securities Exchange Act, as published in Release No. 34-63576, File Number S7-45-10, Registration of Municipal Advisors.  Several Members of the House and Senate have met with SEC staff to advocate for a rule that would be similar in applicability to the bills, H.R. 2827 and S. 3620, both which are discussed below. The comment period has closed, and the SEC is currently working on a Final Rule.

    Legislative Action

    112th Congress

    Congressman Robert Dold, an Illinois Republican, introduced H.R. 2827 in August 2011, defining the municipal advisors which will be subject to SEC registration and contains certain exemptions from registration.   A hearing was held in July 2012 in the Subcommittee on Capital Markets and Government Sponsored Enterprises of the House Committee on Financial Services.  The AICPA submitted a letter to the Committee in advance of the July Subcommittee hearing supporting H.R. 2827, conditioned on the exemptions being expanded to include CPAs doing customary and usual accounting services.  The bill was marked up in the Subcommittee in August 2012 and was favorably reported to the full Committee.  In September 2012, the House Financial Services Committee marked-up and favorably reported the bill with a vote of 60-0.  The AICPA sent a letter in support of the bill to the members of the House Financial Services Committee.  At the full committee mark-up, Congressman Dold offered a substitute bill that defined municipal advisors without including CPAs who perform customary and usual accounting services.   Gwen Moore, a Wisconsin Democrat, took the lead in negotiating the compromise substitute bill for the Democrats, making this a truly bipartisan bill.  The bill overwhelmingly passed the House on a voice vote in September 2012.

    In September 2012, Senator Roger Wicker, a Mississippi Republican, introduced S. 3620, a companion bill to H.R. 2827.  The Senate did not take action on the bill during 2012, therefore, new bills will need to be reintroduced for these proposals to be considered in the 113th.

    113th Congress

    Congressman Steve Stivers, an Ohio Democrat, and Congresswoman Gwen Moore, a Wisconsin Democrat, introduced the Municipal Advisor Oversight Improvement Act of 2013, H.R. 797 in February of 2013.  It is identical to the Dold/Moore bill from the 112th Congress.

    AICPA Position

    The AICPA supports H.R. 797, and will continue to advocate for CPAs who provide only customary and usual services from having to register as municipal advisors, whether through legislative or regulatory action.


    Copy of Legislation

    All major Congressional actions related to municipal advisor legislation are available on the Library of Congress's THOMAS website by searching for the legislation by bill number.

    AICPA Comment Letter to the SEC

    February 25, 2011 AICPA letter to the SEC

    AICPA Letters to the House Financial Services Committee regarding H.R. 2827

    September 10, 2012 AICPA Letter to the House Financial Services Committee
    July 19, 2012 AICPA Letter to the House Financial Services Subcommittee on Capital Markets

    Staff Contact

    Peter Kravitz
    Director, Congressional and Political Affairs

    Mary Foelster
    Director, Governmental Auditing and Accounting

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    AICPA Comment Letter to DOL Regarding Proposed Overtime Rule

    Comment Letter Comments in response to the DOL July 6, 2015 Notice of Proposed Rulemaking to amend the FLSA exemptions from minimum wage and overtime requirements for executive, administrative, professional, outside sales, and computer employees.
    Published on September 24, 2015

    ERISA Fiduciary Definition - Appraisers of Employee Stock Ownership Plans

    Article The AICPA believes that the U.S. DOL should implement rules that would require appraisers of ESOPs to meet minimum qualification requirements, including holding relevant credentials and training, and comply with applicable professional valuation standards.
    Published on August 03, 2015

    Innovation Act Support Letter - US House

    Legislative Letters Letter sent by Barry Melancon to Members of the U.S. House of Representatives in support of HR 9, the Innovation Act.
    Published on July 16, 2015

    Federal Legislative and Regulatory Issues

    Federal Law This page highlights the advocacy issues in which the Congressional & Political Affairs Team is advocating on behalf of the profession, and also those issues that the team has recently followed.
    Published on June 03, 2015

    Audits of FHA-Approved Participants and Related HUD Requirements

    Article FHA proposes new rule to strengthen risk management and shift accountability for the underwriting of FHA-insured loans to the mortgage banks. It may no longer require FHA to approve loan correspondents (mortgage brokers) participating in the FHA program and HUD would no longer require FHA to submit audited financial statements or audits
    Published on June 03, 2015

    Accounting Partnership Retirement Practices

    Article In recent years, Equal Employment Opportunity Commission (EEOC) staff have been investigating and considering litigation against accounting firms organized as partnerships with a goal of requiring firm partners to be treated as “employees” for purposes of the Age Discrimination in Employment Act (ADEA). The AICPA has written the EEOC asking
    Published on June 02, 2015


    Overview Extensible Business Reporting Language (XBRL) used in financial and other reporting allows for easier access to more transparent information.  AICPA supports legislative proposals to utilize XBRL by companies, Federal agencies and recipients of Federal funds.
    Published on June 02, 2015

    Preserving the Cash Basis Method of Accounting for CPA Firms

    Overview The AICPA is opposed to certain provisions included in tax reform proposals that would limit the availability of the cash basis method of accounting.
    Published on June 02, 2015

    H.R. 1, Tax Reform Act of 2014

    Article Legislative text of Chairman Camp's tax reform act of 2014.
    Published on June 02, 2015

    Interstate Taxation/Mobile Workforce Bill

    Article The AICPA is supporting legislation that would reduce the tax burden and compliance requirements related to nonresident state income tax withholding laws.
    Published on May 13, 2015

    Section 404(b) of Sarbanes-Oxley Act of 2002

    Article The Sarbanes Oxley Act requires that the management of public companies assess the effectiveness of the internal control of issuers for financial reporting.  Section 404(b) requires a publicly-held company’s auditor to attest to, and report on, management’s assessment of its internal controls. AICPA believes that all investors in public companies
    Published on May 13, 2015

    Dodd-Frank Whistleblower Rules

    Article Dodd-Frank Act Sections 922 and 748 require the Securities and Exchange Commission and Commodities Futures Trading Commission to implement rules to pay cash awards of up to 30% in settlements over $1 million to whistleblowers who voluntarily provide original information about violations of the Securities laws and Commodity Exchange Act,
    Published on May 13, 2015

    FASB Independence and Fair Value Accounting

    Article The AICPA strongly and unequivocally supports independence of the U.S. and international accounting standard setting bodies, the Financial Accounting Standards Board (FASB) in Norwalk, Connecticut, and the International Accounting Standards Board (IASB) in London.
    Published on May 01, 2015

    March 15, 2015 AICPA Letter to Senate Finance Committee Business Income Tax Reform Working Group

    Legislative Letters March 15, 2015 AICPA Letter to Senate Finance Committee Business Income Tax Reform Working Group
    Published on April 22, 2015

    Coalition Letter to SFC Business Tax Reform Working Group

    Legislative Letters In April 2015, the AICPA joined a coalition including the American Council of Engineering Companies, American Farm Bureau Federation, American Institute of Architects, American for Tax Reform, Farmers for Tax Fairness, Investment Adviser Association, and multiple law firms and bar associations in writing a letter to the Senate Finance Committee’s
    Published on April 15, 2015

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