Leadership / Management | Legislative / Regulatory

Maryland’s 2015 legislative victories underscore the value of associations

For anyone asking if associations are still relevant, the Maryland Association of CPAs has an emphatic, one-word answer:


The MACPA and its members drove that point home during the 2015 session of Maryland’s General Assembly. With considerable support from the MACPA, the state’s lawmakers passed a pair of bills that were high on CPAs’ legislative agenda, each of which provides some important protections for CPAs who do work in Maryland.

  • The first (House Bill 878 / Senate Bill 536) was a technical correction that updates and expands the definition of “attest,” thus providing greater protection for one of the CPA profession’s most important services. The measure passed unanimously in both chambers.
  • The second (HB 164 / SB 301) changes Maryland’s appeal bond law by adding a $100 million cap on such bonds. Here’s why the measure is important: Due to the increasing complexity of business today, it is not unusual to see lawsuits with extraordinarily high damages and a high possibility of questionable verdicts in lower courts. This puts Maryland CPAs in an awkward position of having to post a bond that could bankrupt or financially harm a firm or business in order to pursue the matter further in the appellate process. The bill provides some important liability protection for Maryland’s largest CPA firms.

The MACPA had also sought an additional cap of $1 million for small businesses, but that provision was removed from the final version of the bills. The MACPA will continue to work to add that cap for smaller CPA firms in future General Assembly sessions.

“This is what we do. Legislative advocacy is the one thing an association can do that no one else will do for our members,” said MACPA Executive Director Tom Hood, CPA. “Our members don’t have the time or the resources to do this type of advocacy on the scale that will positively impact the entire profession. The MACPA does.

“Maryland’s General Assembly considers hundreds, if not thousands, of bills each spring,” Hood added. “It’s the MACPA’s job to monitor those bills, to fight for the ones that will protect our profession and fight against the ones that will hurt us. That’s the value of a professional association. We do the things that CPAs can’t do on their own.”

Mobilizing a profession
The “attest” correction moved through the legislature rather smoothly, but the appeal bond cap provided a few more challenges — and was a prime example of how an association can marshal its forces to move mountains.

The effort began shortly after the November 2014 elections, when Maryland voters elected a new governor and replaced 42 percent of the House of Delegates and 11 percent of the Senate. Clearly, the time had come for Maryland CPAs to make their voices heard.

With so much turnover in the legislature, the MACPA and its members began connecting with the new lawmakers and educating them on matters that impact CPAs, their clients, and Maryland’s business community. A record crowd of nearly 200 CPAs turned out in January for CPA Day in Annapolis, the MACPA’s annual legislative call to arms. MACPA members spent the day meeting face to face with their legislators and discussing issues that impact the profession.

Then the real work began.

As the General Assembly session was winding down in April, it became clear that the appeal bond measure was in danger of stalling in committee. While the MACPA’s lobbyists went to work, the association called upon its legislatively active members to contact their legislators and get the bills moving in the right direction. This “Key Person” Program is one of the most important pieces of the MACPA’s legislative puzzle, and it didn’t disappoint.

With MACPA members contacting key legislative contacts just hours before the General Assembly session ended, legislators were convinced to move the measure out of committee and let the entire legislative body vote on the measure. A few amendments aside, the bill passed.

“This is a huge win in support of firms in general but larger firms specifically,” said Lisa Cines, CPA, regional partner in charge of business development and marketing at Dixon Hughes Goodman. “Due to the level of insurance that we carry, we are often targets of suits, and the cost of the appeal bond could influence a decision to appeal an award. The legislation puts Maryland on a more level playing field with other states so that we are not seen as a state that is unfriendly to business.”

A long history of legislative success
The MACPA’s legislative victories stretch far beyond the 2015 General Assembly session — so far, indeed, that it’s fair to play Devil’s Advocate and ask: What if state CPA associations and their members weren’t there to monitor legislation and lobby for the profession’s position on the issues of the day?

The answers are frightening.

  • It might be harder for CPAs to work across state lines. With strong support from the MACPA, Maryland’s General Assembly passed a measure that allows CPAs in other states to provide their services in Maryland without having to obtain a license or notify the State Board of Public Accountancy. It’s part of a nationwide “mobility” movement designed to make it easier for CPAs to do their work in multiple states.
  • Maryland’s State Board of Public Accountancy wouldn’t have the resources it needs to serve CPAs well. With MACPA support, legislators approved a bill that provides separate funding for the State Board of Public Accountancy via CPA licensure fees. Those funds can’t be cut or diverted by state lawmakers. They are used solely to serve Maryland CPAs.
  • Maryland CPAs might have been subject to onerous Sarbanes-Oxley-type legislation that would have stifled their work. In the wake of the Enron and WorldCom scandals, some people lobbied hard to apply Sarbanes-Oxley-esque restrictions at the state level. Instead, with support from the MACPA, the General Assembly passed a law mandating peer review in Maryland as a way to ensure that high standards of professionalism and independence are upheld and that CPA firms maintain an effective system of quality control.
  • It might be easier for someone to sue a CPA or one of their clients. In past years, trial lawyers have introduced bills designed to replace Maryland's current system of determining a defendant's liability with a "comparative negligence" system that makes recovery against a defendant easier – even when the person bringing the lawsuit substantially contributed to his own injuries. Maryland courts allow a person sued for negligence or wrongdoing to raise the "contributory negligence" defense – that is, the party sued may claim that the plaintiff contributed to his injury and thus should not be allowed to recover from the defendant. This rule prevents a person from shifting his or her responsibility to others. The MACPA works each year to make sure the state’s contributory negligence rule is retained.
  • CPA services might be subject to sales and use taxes. The state is always looking for ways to raise revenue, and a tax on the services you provide would hurt both you and your clients. The MACPA gears up to fight this battle every year.

Without someone diligently watching out for — and acting on — legislation that impacts CPAs and their clients, it might be a lot harder for CPAs to do business in Maryland.

“The MACPA team has done a great job of staying focused on the issues that are most important to us as practitioners,” Cines said.

That’s the power and continuing value of a professional association. That’s what the MACPA brings to the table.


Bill Sheridan