05/12/2021 03:15 PM House LABOR & COMMERCE

            HB 44-PRACTICE OF ACCOUNTING; LICENSURE                                                                         
                                                                                                                                
4:43:07 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  SPOHNHOLZ announced  that the  final order  of business                                                               
would be HOUSE  BILL NO. 44, "An Act relating  to the practice of                                                               
accounting."                                                                                                                    
                                                                                                                                
[Before the committee was CSHB 44(STA).]                                                                                        
                                                                                                                                
4:43:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STEVE  THOMPSON,  Alaska  State  Legislature,  as                                                               
prime sponsor of HB 44, thanked the committee.                                                                                  
                                                                                                                                
4:44:36 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  FIELDS explained  that the  proposed legislation  would                                                               
increase  oversight  of   out-of-state  accountants  who  provide                                                               
services within Alaska.                                                                                                         
                                                                                                                                
4:45:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCARTY  shared  his  support  for  the  proposed                                                               
legislation.                                                                                                                    
                                                                                                                                
4:45:35 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  SPOHNHOLZ  expressed  understanding that  the  proposed                                                               
legislation would  eliminate the  licensing fee  for out-of-state                                                               
accountants.   She asked how  the state would have  the resources                                                               
for enforcement.                                                                                                                
                                                                                                                                
4:46:42 PM                                                                                                                    
                                                                                                                                
SARA CHAMBERS, Director, Division  of Corporations, Business, and                                                               
Professional   Licensing   (CBPL),    Department   of   Commerce,                                                               
Community,  and  Economic  Development,  said that  CBPL  is  not                                                               
anticipating  a  spike  in  investigations as  a  result  of  the                                                               
proposed legislation; other  states have not seen  an increase in                                                               
investigations;  there have  been no  demonstrable investigations                                                               
of  out-of-state practitioners;  and eliminating  this particular                                                               
permit would  save the resources  normally used in  the front-end                                                               
audit process.                                                                                                                  
                                                                                                                                
4:47:52 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  SPOHNHOLZ shared  that  there exists  currently a  $300                                                               
application fee  and a $900 permit  for out-of-state partnerships                                                               
and limited  liability companies.   She asked whether  those fees                                                               
would continue to exist under the proposed legislation.                                                                         
                                                                                                                                
MS. CHAMBERS deferred to Ms. Hondolero.                                                                                         
                                                                                                                                
4:48:29 PM                                                                                                                    
                                                                                                                                
CORI   HONDOLERO,  Executive   Administrator,  Board   of  Public                                                               
Accountancy,   Divisions    of   Corporations,    Business,   and                                                               
Professional  Licensing, Department  of Commerce,  Community, and                                                               
Economic Development,  responded that those fees  would no longer                                                               
be incoming.   She  said that  the number  of licenses  total 98,                                                               
with an expiration date of December 31, 2021.                                                                                   
                                                                                                                                
CO-CHAIR SPOHNHOLZ noted that eliminating the fees for out-of-                                                                  
state licensees would result in a revenue loss of $88,000.                                                                      
                                                                                                                                
MS. HONDOLERO replied that the amount sounds accurate.                                                                          
                                                                                                                                
4:50:14 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS  asked Ms.  Tarver to explain  the ways  in which                                                               
the  proposed  legislation  would provide  greater  oversight  of                                                               
firms based outside Alaska.                                                                                                     
                                                                                                                                
KAREN  TARVER,  CPA, Elgee  Rehfeld,  LLC,  pointed out  that  AS                                                               
08.04.421,  which  is  the   out-of-state  permit  and  exemption                                                               
section, would be  deleted in its entirety.  The  way the statute                                                               
currently reads,  she said, an  exemption is allowed  for out-of-                                                               
state firms that are not  providing audit services.  The proposed                                                               
changes include an exemption for  all attestation services, which                                                               
include  audit services  as well  as financial  statement review,                                                               
review  of prospective  financial  statements, other  engagements                                                               
done in accordance with a  public accounting oversight board, and                                                               
any  exemption   examinations  that   follow  the   standards  of                                                               
attestation  engagements as  published by  AICPA.   She explained                                                               
that the new  statute would let firms know that  if a licensee is                                                               
practicing in  Alaska and is  providing anything in  the practice                                                               
of  public accounting  as defined  by statute,  that licensee  is                                                               
accepting Alaska's statutes and regulations.                                                                                    
                                                                                                                                
4:54:04 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  SPOHNHOLZ  stated  that  she  is  concerned  about  the                                                               
possibility of reducing revenues to CBPL by $88,000.                                                                            
                                                                                                                                
MS. CHAMBERS  explained that the  Board of Public  Accountancy at                                                               
CBPL has  a surplus  of several  hundred thousand  dollars, which                                                               
should remain  for approximately the  next four to six  years, at                                                               
which  time firm  mobility  in  Alaska may  be  reexamined.   She                                                               
pointed out that it's the opinion  of CBPL and the board that the                                                               
lack of license revenue is  counteracted by the ability of Alaska                                                               
practitioners to work in other states.                                                                                          
                                                                                                                                
4:57:54 PM                                                                                                                    
                                                                                                                                
LESLIE SCHMITZ,  Chair, Board of Public  Accountancy, Division of                                                               
Corporations,  Business,  and  Public  Licensing,  Department  of                                                               
Commerce, Community,  and Economic  Development, agreed  with Ms.                                                               
Chambers'  assessment  that  the  loss   of  fees  is  worth  the                                                               
expansion of mobility for Alaska-based  accountants.  She pointed                                                               
out that  the board would  have more oversight over  the services                                                               
provided by out-of-state accountants to Alaskan clients.                                                                        
                                                                                                                                
CO-CHAIR  SPOHNHOLZ asked  whether Ms.  Schmitz studied  how firm                                                               
mobility works in smaller states.                                                                                               
                                                                                                                                
MS. SCHMITZ deferred to Mr. Neill.                                                                                              
                                                                                                                                
5:00:09 PM                                                                                                                    
                                                                                                                                
THOMAS  NEILL, CPA,  Chair,  Uniform  Accountancy Act  Committee,                                                               
American Institute of Certified  Public Accountants (AIPCA), said                                                               
that  he checked  with  AIPCA staff  regarding  the existence  of                                                               
feedback  or  complaints  on  the  specific  issue  of  mobility.                                                               
Hearing  none,  he said,  he  approached  Jennifer Sciba,  Deputy                                                               
Director of the  Washington State Board of  Accountancy, who said                                                               
that there have  been very few, if any,  complaints about out-of-                                                               
state  firms  practicing within  states  that  have adopted  firm                                                               
mobility.   He said, "There's  no statistical data  because, from                                                               
what I'm hearing, it's just not happening."                                                                                     
                                                                                                                                
5:02:29 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS  moved to  report CSHB  44(STA) out  of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.  There  being no objection, CSHB 44(STA)  was reported out                                                               
of the House Labor and Commerce Standing Committee.