Legislature(1997 - 1998)
02/11/1997 01:32 PM Senate L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE LABOR AND COMMERCE COMMITTEE
February 11, 1997
1:32 P.M.
MEMBERS PRESENT
Senator Loren Leman, Chairman
Senator Jerry Mackie, Vice Chairman
Senator Tim Kelly
Senator Lyman Hoffman
MEMBERS ABSENT
Senator Mike Miller
COMMITTEE CALENDAR
SENATE BILL NO. 75
"An Act relating to the regulation of accountants; and providing
for an effective date."
MOVED CSSB 75 FROM COMMITTEE
SENATE BILL NO. 49
"An Act repealing certain filing statements and bonds for
enforcement and collection of certain taxes and license fees;
relating to service of process on nonresident taxpayers; and
providing for an effective date."
MOVED SB 49 FROM COMMITTEE
PREVIOUS SENATE COMMITTEE ACTION
SB 75 - No previous action to consider.
SB 49 - No previous action to consider.
WITNESS REGISTER
Mr. Tim Benintendi, Staff
Senator Tim Kelly
State Capitol Bldg.
Juneau, AK 99811-1182
POSITION STATEMENT: Commented on SB 75.
Ms. Catherine Reardon, Director
Division of Occupational Licensing
Department of Commerce and Economic Development
P.O. Box 110806
Juneau, AK 99811-0806
POSITION STATEMENT: Supported SB 75.
Mr. Charles Griffin, CPA
P.O. Box 670
Palmer, AK 99645
POSITION STATEMENT: Supported SB 75.
Mr. Bob Bartholomew, Deputy Director
Income and Excise Audit Division
P.O. Box 110420
Juneau, AK 99811-0420
POSITION STATEMENT: Supported SB 49.
ACTION NARRATIVE
TAPE 97-5, SIDE A
Number 001
SB 75 REGULATION OF ACCOUNTANTS
CHAIRMAN LEMAN called the Senate Labor and Commerce Committee
meeting to order at 1:32 p.m. and announced SB 75 to be up for
consideration.
MR. TIM BENINTENDI, Staff to Senator Tim Kelly, explained that SB
75 changes the application requirements for taking the Alaska CPA
exam. It requires an additional academic course in college-level
accounting work or a one-year minimum direct accounting experience
in the field under the supervision of a CPA. It does not alter the
test, itself, or the licensing procedure.
He explained the reason for the bill is that Alaska has experienced
an unusually large increase in applicants for the exam which is
given twice a year and most of those are foreigners. They are
people, most of whom, do not tend to practice or even get licensure
in the State of Alaska. He said the impact on the Division of
Occupational Licensing and the security of the exam, itself, are
considerable.
The state of Montana has recently, through Emergency Orders,
addressed this same problem and Alaska is now the easiest State to
take the CPA exam in.
MR. BENINTENDI said that Section 2 addresses another issue which
has to be in statute and that is to make the designation of EA
(Enrolled Agents) official. Enrolled agents are unlicensed
accountants or tax practitioners that are certified by the IRS to
practice tax preparation. It is a commonly recognized designation
in the business community and they want to make it official.
Section 3 provides for an immediate effective date.
CHAIRMAN LEMAN asked if the reason for the immediate effect date
was for the exam scheduled in May. MR. BENINTENDI replied yes.
SENATOR KELLY asked if it was intended to affect just the May
test. MS. CATHERINE REARDON, Director, Division of Occupational
Licensing, answered that she didn't anticipate the bill would make
it into law before May and the next exam is in October which she
anticipates it will affect.
SENATOR KELLY said it might be unfair for all those people planning
to take it in May to all-of-a-sudden jerk it out from them and
asked if the Department could survive another large test. MS.
REARDON replied that they have prepared for the May exam already
and yes, they could survive it.
SENATOR LEMAN commented that if there was no effective date, it
would just become law 90 days after the Governor's signature which
would still be in time for the October exam.
SENATOR KELLY asked when they would start taking applications for
the October examination. MS. REARDON replied that some people have
already had their application approved by the Board and have
postponed taking the test. She said she had talked with the
Assistant Attorney General about what the State's obligations may
be towards people who have already qualified and the advice was
that they should write to people and tell them they might need to
reapply and may not qualify. SENATOR KELLY said he just wondered
how fair that is.
SENATOR MACKIE was concerned that if this bill doesn't pass until
the end of session, it might affect the October exam and suggested
using a July 1 effective date, if not the immediate date.
Number 131
MR. CHARLES GRIFFIN, a Palmer CPA, said he had been practicing for
24 years. He has also served on the State Board of Public
Accountancy for about seven years. He said the bill before them
has the unanimous endorsement of the Board because of the
overwhelming number of foreign candidates. He supported Mr.
Benintendi's testimony. He said they do not seek to increase the
licensing or certificate requirements, but they want to add either
a little bit of accounting education or accounting experience to
qualify the exam applicants. They are unable to tie anything to a
residency or a need to sit for the exam, such as live, work, or
attend school, in Alaska. So this excludes most of the foreign
candidates who have no connection with accounting or Alaska and
only seek to pass the exam for credentialling purposes. They
believe all their Alaskan candidates will qualify. They purposely
did not require an accounting major or put the hours of accounting
requirements at the top of the list because they didn't want to
disenfranchise any Alaskan candidates.
The Board requested an immediate effective date not anticipating to
make the change for the May examination for which there is a prior
60-day application deadline which would be about March 5. He said
it was the Board's intent that the requirements in effect on the
application deadline would determine the criteria for eligibility
to take the exam.
MR. GRIFFIN said the second change in Section 2 relative to EA is
because that abbreviation is already in statute and this allows the
people who are enrolled to practice before the Internal Revenue
Service to technically use the title EA without statutory change.
Number 182
SENATOR KELLY asked how important it is to try to eliminate the May
applicants. MR. GRIFFIN said he thought that was the Board's
intent, but they recognize that they qualified a number of people
last fall for the May exam. So they fully intend to have the
change go into effect for the November 1997 examination with as
much notice as possible. SENATOR KELLY said they might have even
more people show up in May to get in under the wire. MR. GRIFFIN
said that the application deadline is 60-days prior to that and
they are coming in fast now.
Number 220
SENATOR KELLY asked how much it costs to take the exam. MR.
GRIFFIN replied that there's a $50 application fee to qualify to
sit for the exam and $100 for each taking of the exam.
MS. REARDON added that the $50 application fee is to cover their
processing fee. The $100 covers the price of the actual exam
itself.
SENATOR KELLY asked if the Board sets its own fees or is it done by
statute. MS. REARDON replied that it is a Department regulation.
SENATOR MACKIE wanted to know if Brad Shaffer in Sitka had reviewed
the legislation and supported it.
Number 283
MR. BRAD SHAFFER said he has been on the Alaska State Licensing
Board for 17 years. He said it has been one of his weekend
projects to draft what is in front of the committee now. He feels
it is in the best interests principally from the security point of
view because there were three instances of cheating during the
November exam. During this exam he found one in a group of 30. He
said security is very demanding in a room with about 200 people.
They are also having problems dealing with large volumes of people.
In Southeast the exam is in Ketchikan. In Anchorage the exam would
normally be held in one location, but they are going to have to get
another location. With shuffling around there can be inconsistent
exam conditions - like desk space, for instance.
SENATOR LEMAN asked if people seat themselves during an exam or
does he seat them at random. MR. SHAFFER explained that there are
some very strict controls. Everything is identified by candidate
number. The standard group the exam comes in is 30. He said they
check identification and even escort candidates to the restroom.
SENATOR KELLY asked if the committee changed the immediate
effective date to June 1, would that take care of the following
test applicants. MS. REARDON replied yes; and said that they might
just hold all the applications they receive in June.
Number 314
SENATOR KELLY moved to change the immediate effective date to June
1. There were no objections and it was so ordered.
SENATOR MACKIE moved to pass CSSB 75 from committee with individual
recommendations with the accompanying fiscal note. There were no
objections and it was so ordered.
SB 49 SERVICE OF PROCESS ON NONRES TAXPAYERS
CHAIRMAN LEMAN announced SB 49 to be up for consideration.
MR. BOB BARTHOLOMEW, Deputy Director, Income and Excise Division,
explained that SB 49 asks the legislature to repeal a current tax
bond program that's on statute that requires non-resident
businesses or individuals to file a bond and fill out an affidavit
to secure payment of their taxes to the State. Since that time it
has been determined that the program just isn't worth the 800 hours
and the paper the Department of Revenue staff are processing it on.
Alaska is the only state that still has the requirement and staff
at Department of Revenue can't remember having to ever go against
the bond or affidavit to secure a tax payment. They have other
tools that they can use like securing bank accounts, etc.
MR. BARTHOLOMEW said they are asking to be allowed to redirect the
800 hours into more compliance efforts that will get the State more
money.
Number 356
CHAIRMAN LEMAN said he should bring up their request for the
redirection of funds in the Finance subcommittee for Revenue.
SENATOR MACKIE said he agreed with Mr. Bartholomew's testimony
regarding the redirection of staff time.
SENATOR MACKIE moved to pass SB 49 from committee with individual
recommendations. There were no objections and it was so ordered.
CHAIRMAN LEMAN adjourned the meeting at 2:00 p.m.
| Document Name | Date/Time | Subjects |
|---|