Legislature(1997 - 1998)
03/19/1997 03:27 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 140 - BOARD OF PUBLIC ACCOUNTANCY Number 1295 CHAIRMAN ROKEBERG announced the committee would hear HB 140, "An Act relating to the Board of Public Accountancy; extending the termination date of the Board of Public Accountancy; and providing for an effective date." Number 1311 RANDY WELKER, Legislative Auditor, Legislative Audit Division, Legislative Affairs Agency, explained the bill was introduced on behalf of the Legislative Budget and Audit Committee. It is a sunset bill relating to the Board of Public Accountancy. He noted the committee members have the copy of their audit report. Mr. Welker explained Section 1 extends the Board of Accountancy from its current termination date of 1997 to the year 2003, which is a six year renewal period. MR. WELKER explained Section 2 deletes conflicting language. The language being deleted in lines 11 through 14 basically says that a person who has served for two complete terms can't be reappointed. There are some general licensing statutes that apply to all boards that say you can only serve two terms, whether they are two complete terms or not. If you're appointed mid-term to replace somebody and you complete that term, you're eligible for a second term and then that's it. He said they felt for administrative ease with boards and commissions that the general statute is adequate, so they are recommending that this language be deleted from the Board of Accountancy. Number 1396 CHAIRMAN ROKEBERG asked if this particular section, Title 08.04.030, is part of the accountancy section. MR. WELKER said that is correct. This deletes language out of the Accountancy Act. He noted AS 08.01 is the general licensing statutes of the Division of Occupational Licensing that provides a variety of general provisions relating to licensing of all professions. CHAIRMAN ROKEBERG asked if there is anything in AS 08.01 that provides for a standard removal of members of any boards or commissions. MR. WELKER said he doesn't believe there is. He said what was identified was that there is a conflict in the reappointment language. Number 1452 MR. WELKER informed the committee that Sections 3, 4, 5 and 6 all primarily deal with one aspect. He said in each one of those sections they are deleting the reference to an annual fee, annual registration or an annual licensing fee. Mr. Welker said the general licensing statutes of occupational licensing allows the division to establish fees on a biannual basis. The language is being changed to comport to actual practice where they do not collect an annual fee, it is biannual. He said they are replacing "annual fee" with "required fee." He said also in Section 3 they have deleted the word "permit." The Accountancy Act, in general, is in need of a serious rewrite because of the reference to permits. The statutes reference "a license" and "a permit." The board only actually issues a license and they don't issue permits. He said it will take some thought by the board to make sure that the rewrite gets the reference to permits out of the statute. It would be best done by the board and an overall rewrite of the Accountancy Act. Mr. Welker said that it was inserted in Section 3, but not throughout the rest of the statutes. Number 1548 MR. WELKER referred to Section 7 and said it is a repealer of a section in the Accountancy Act. This section related to the issuance of a temporary certificate which has never been used. Mr. Welker said he believes basically the qualifications that were identified for a temporary certificate would enable you to get a license anyway, so that has never been in effect. MR. WELKER explained Section 8 makes the act effective July 1. The Board of Accountancy is set to expire June 30, 1997. Without extending the lapse date, they would have one year to conclude their affairs. Number 1595 REPRESENTATIVE JOE RYAN asked if the department is anticipating increasing the fee. MR. WELKER responded in the negative. He said it is the Legislative Audit Division's proposed change to make the Accountancy Act statutes comport to practice. It is across the board. They went to a biannual fee for administrative efficiencies of collecting license fees every two years. Mr. Welker informed the committee that the division is under a mandate to be self- supporting. On occasion, there are adjustments to the various licenses and fees of all boards to keep in balance. He noted there are a variety of boards that are satisfied and dissatisfied with their fees at any one point in time because the costs vary depending on the regulation writing and the investigations that are going on at any given time. Number 1663 REPRESENTATIVE HUDSON asked if the fee increases are submitted to the legislature for approval or is there blanket approval. MR. WELKER responded that the statutes give the Division of Occupational Licensing blanket authority to set the fees by regulation for all professions. CHAIRMAN ROKEBERG asked Mr. Welker if during his audit he came across any instances of complaints. He also asked if there were any license revocations in the immediate past. MR. WELKER said he isn't aware of any serious concerns or issues that are before the board. He noted he is sure there are ongoing investigations as there are in virtually all professions. He said Mr. Griffin or staff from the Division of Occupational Licensing might be better able to speak to that. CHARLES GRIFFIN, Chairman, Alaska State Board of Accountancy; Certified Public Accountant, testified via teleconference. He said the board is appreciative that there is recognition that they are meeting the public's interest and are pleased the Legislative Budget and Audit Committee and the Labor and Commerce Committee is considering extending the board. He said he would note that he believes the extension date was amended to 2001 in the Senate Labor and Commerce Committee's version. The board has obviously been involved in the sunset audit process. Mr. Griffin referred to fee increases, complaints, revocations and some of the uncertainties as to permits, certificates and licenses, and said he believes there are a number of people on the board who would seek to rewrite and possibly restructure the Board of Accountancy. He said they have been struggling to accommodate all of their exam candidates and "fight fires." He said, "We, as a board, have some comments about the finances and stewardship of the division and some of the investigation and complaint results, but those unfortunately aren't on the table today." Mr. Griffin said they agree with an extension of the board. Number 1990 CHAIRMAN ROKEBERG asked Mr. Griffin if he has a preference for the expiration date being 2003 or 2001. MR. GRIFFIN said he doesn't know that the board has addressed it as a whole. He said his personal preference is 2001. Mr. Griffin explained he had heard a rumor that just because of the volume of the audit work, they were thinking of going to ten year cycles. He said he doesn't believe that is fair to the licensees, the public or the board, that they be audited that infrequently to ensure that the structures, finances and policies are in order. Mr. Griffin said his personal opinion is that four years is a good cycle. Number 1966 REPRESENTATIVE RYAN said the Legislative Budget and Audit Report recommends that the legislation extend the board's termination date to June 30, 2003. CHAIRMAN ROKEBERG said the Legislative Budget and Audit Committee recommended that the date be 2003. He said it's his opinion that a lengthier period of sunsetting eases the burden on the various committees in the legislature of having to come back too frequently to revisit these issues. Chairman Rokeberg said there is an issue about auditing and asked Mr. Welker to address it. Number 2010 MR. WELKER since they started doing sunsets in 1978, they have been on a four year cycle. In the early years of sunset, that was valuable as it let them deal with things on the various boards. As time has passed, the benefit gained by a four year cycle seems to be demising. He noted at one time they did propose sweeping legislation to rewrite all the occupational licensing statutes to spread them out over a ten year cycle. That wasn't successful and they have sort of compromised down to about a six year recommendation. Mr. Welker said there are some boards that they do sunsets on and if they think there are significant problems with the board, they would recommend a shorter cycle. He noted with boards, such as the Board of Accountancy, they don't see the problems that they have with other boards. The Senate Labor and Commerce Committee has made it known that they prefer a four year cycle. CHAIRMAN ROKEBERG said if the sunset provisions are an automatic kick-in of an audit, for example, if they go to six years, they are only audited every six years. MR. WELKER said that is correct. CHAIRMAN ROKEBERG asked if there couldn't be an audit every four years and a sunset every six years. MR. WELKER said that language could be worked into the bill. He explained currently, they initiate their own audits based on the termination cycle and the review for the need to continue the existence of the board. He said the four year audit cycle wouldn't benefit him, but it might benefit the legislative process. CHAIRMAN ROKEBERG said when the Legislative Budget and Audit audits the particular boards and commissions, they're merely auditing for the needs for their extensions. He asked if they are actually doing a traditional accounting audit. MR. WELKER said the sunset statutes lay out certain criteria that are to be considered and whether the legislature should continue a board or not. It is not a full blown financial audit of the board. Number 2158 CHAIRMAN ROKEBERG asked Mr. Griffin if that was his understanding. MR. GRIFFIN said he supports retaining the four year cycle with regard to the Board of Accountancy. In the absence of a broader legislative look at the structure of occupational licensing in all of the professions, some of the members of the board have become frustrated with the process. He said they would like a semi- private board operation rather than the existing structure. If audits are every six years, it will only be discussed every six years instead of every four years. Number 2226 REPRESENTATIVE RYAN said he thinks the committee is outvoted on the four year date as it seems to be the will of the people involved. He said he brought up the six year recommendation for the committee's awareness. CHAIRMAN RYAN pointed out that it is in the bill. REPRESENTATIVE RYAN said he would make a conceptual amendment to make it four years, 2001. CHAIRMAN ROKEBERG said he would object for the purpose of discussion. He asked Annette Kreitzer if she could shed some light on the issue. ANNETTE KREITZER, Legislative Assistant to Senator Loren Leman, Alaska State Legislature, referred to testimony in the Senate Labor and Commerce Committee and said there has been several boards where an "old boys network" has formed and there has been concern that if some of these boards aren't looked at every four years, there becomes a situation where members of the profession who are coming in from out of state, for example, may be excluded for reasons that aren't very valid. They wanted an opportunity to hear comments such as the kind Mr. Griffin made regarding fees. They felt that auditor's recommendation was too long. CHAIRMAN ROKEBERG withdrew his objection. There being no further objection, he stated the conceptional amendment to change the date to 2001 has been adopted. Number 2327 REPRESENTATIVE COWDERY made a motion to move HB 140, as amended, out of committee with the accompanying fiscal note. Hearing no objection, CSHB 140(L&C) was moved out of the House Labor and Commerce Committee.
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