Legislature(2025 - 2026)BARNES 124
03/12/2025 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB75 | |
| Overview(s): Unemployment Insurance | |
| HB121 | |
| HB123 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HB 121 | TELECONFERENCED | |
| + | HB 75 | TELECONFERENCED | |
| *+ | HB 123 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 121-ACCOUNTING; PRACTICE PRIVILEGE
4:09:55 PM
CO-CHAIR FIELDS announced that the next order of business would
be HOUSE BILL NO. 121, "An Act relating to the practice of
accounting; and providing for an effective date."
4:11:20 PM
REPRESENTATIVE CALVIN SCHRAGE, Alaska State Legislature, as
prime sponsor of HB 121, gave a prepared sponsor statement
[included in the committee file], which read as follows
[original punctuation provided]:
The accounting profession is essential to
Alaska's economy, ensuring financial transparency for
businesses, organizations, and government entities.
However, outdated regulatory barriers are limiting the
number of qualified professionals entering the field.
The demand for accountants is growing nationwide, with
employment in the field expected to increase by 6%
over the next decade. However, the number of CPA's
practicing in Alaska is shrinking. Between fiscal
years 2019 and 2024, CPA licensure in the state grew
by only 3%. If this trend continues, Alaska will face
a worsening shortage of accounting professionals,
limiting access to essential financial services.
HB 121 addresses these issues by:
• Making technical and housekeeping changes to
practice privilege for out-of-state firms to allow
them greater flexibility.
• Removing the outdated and onerous requirement that
students complete an extra year of college, beyond the
120-credit hour bachelor's degree with a concentration
in accounting.
These changes align Alaska with national trends
toward greater flexibility in CPA licensure while
maintaining professional integrity. Candidates will
still be required to pass the Uniform CPA Exam, meet
education and professional experience requirements,
ensuring competency without imposing unnecessary
costs. I encourage my colleagues to support this
important legislation.
4:13:17 PM
AMANDA NDEMO, Staff, Representative Calvin Schrage, Alaska State
Legislature, on behalf of Representative Schrage, prime sponsor,
moved to the second slide of the PowerPoint [included in the
committee file], titled "HB 121 Accountancy Act Changes," which
read as follows [original punctuation provided]:
The accounting profession in Alaska faces workforce
shortages.
Current regulations create unnecessary barriers to
entry.
Aligning with national standards will improve access
to services.
HB 121 makes key changes to modernize the profession.
MS. NDEMO reported that there had been a 30-percent decrease in
candidates sitting for the exam nationally since 2016. She
moved to the third slide and stated that the proposed
legislation would make two key changes relating to the education
requirements for certified public accountant (CPA) licensure and
practice privileges for out-of-state firms.
MS. NDEMO moved to the fourth slide, giving an overview of the
current education requirements for CPAs in Alaska, which read as
follows [original punctuation provided]:
Current requirements:
• 150-credit hours AND two years of experience for CPA
licensure.
National Trends:
• 30 states have introduced legislation removing the
150 credit hour requirement for licensure.
• Many states are moving toward a 'dual pathway'
a) 150 credit hour + one year of experience OR
b) 120 credit hours (Bachelors degree) + two years of
experience
MS. NDEMO noted that the current education requirements are
higher than a standard bachelor's degree, which typically
consists of 120 credit hours. She further noted that the
current requirements add an additional year of college. She
moved to the fifth slide and gave an overview of the proposed
changes to the education requirements under HB 121. The fifth
slide read as follows [original punctuation provided]:
HB 121:
• Removes the 150 credit hour requirement for CPA
licensure (moving to a bachelors + two years of
experience model).
• Retains essential qualification requirements
O Passing CPA exam
O Bachelor's degree with an accounting concentration
O Two years of relevant experience
MS. NDEMO moved to the sixth slide and gave an overview of the
current out-of-state practice privileges. The sixth slide read
as follows [original punctuation provided]:
Current requirements for out-of-state firms
•AS 08.04.240(k)
•Firms that do not have an office in Alaska but
provide, or offer to provide, attest functions in the
state are still required obtain CPA firm permits.
"Firm" means a sole proprietorship, partnership,
limited liability company, corporation, or other legal
entity that can organize as a legal person under state
law. AS 08.04.680(6).
"Attest function" means audit, review, examination of
prospective financial information, and other services
as described in AS 08.04.680(1).
MS. NDEMO added that HB 121 would align practice privilege for
out-of-state firms with out-of-state individuals. She moved to
the seventh slide and gave an overview of out-of-state
individual [CPA] privileges, which read as follows [original
punctuation provided]:
Current requirements for out-of-state individuals (AS
08.04.420 and 08.04.422)
•Licensed to practice public accounting in another
state
•The individual's licensing state satisfies
substantial equivalency requirements to the
qualifications required of an applicant for a license
in Alaska.
•Principal place of business for the practice of
public accounting is in that other state
•Consent to Alaska's jurisdiction and disciplinary
authority of the board
•Assign home state's board as agent for service of
process
•Do not need to provide notice, pay a fee, or submit
documentation
CPA license: license granted by the state of
application after all education, exam, and experience
requirements have been met.
"Principal place of business" office location
designated by an individual for the purposes of
substantial equivalency and reciprocity. AS
08.04.680(17).
"Practice privilege" means a practice privilege
authorized under AS 08.04.420. AS 08.04.680(15).
MS. NDEMO noted that the framework allows out-of-state
individual CPAs to serve Alaska clients without facing
additional licensure barriers while ensuring professional
accountability. She further noted that these privileges are not
extended to out-of-state firms under the current law.
MS. NDEMO moved to the eighth slide, stating that out-of-state
firms are required to obtain a separate Alaska firm permit, even
if they do not have a physical office in the state. She gave an
overview of how HB 121 would address this inconsistency, which
read as follows [original punctuation provided]:
HB 121 -Firm mobility
•Provides for firm mobility
•Aligns firm practice privilege with existing
individual CPA practice privilege.
•Reduces administrative burdens.
•Maintains regulatory oversight.
MS. NDEMO moved to the ninth slide, giving an overview of the
impacts of HB 121, which read as follows [original punctuation
provided]:
Benefits of HB 121
Increases the pipeline of CPA candidates
Encourages business growth and supports business needs
Regulatory oversight remains intact
Makes Alaska a more accessible market for accounting
professionals.
MS. NDEMO moved to the tenth slide, asserting that HB 121 would
ensure that high professional standards are upheld. She stated
that out-of-state individuals and firms would remain subject to
oversight of the Board of Accountancy in their home state and
Alaska's Board of Public Accountancy as a condition of granting
practice privilege.
4:19:09 PM
BETH STUART, Chair, Managing Partner, KMPG LLC, stated that she
obtained her CPA licensing in 1996 and has maintained licensure.
She asserted that accounting professionals around the country
are concerned about the decline of people entering the
profession. She reported that studies have shown that the
decline was partly due to time and costs of required education
beyond a bachelor's degree. She stated that there was a "wave
of legislation around the country" to remove the soft 30-credit
requirement, which she noted are not required to be in
accounting or business. She asserted that removing this
requirement would not be detrimental to the quality of education
or accounting work; rather, the removal of the requirement would
reduce professional and licensure barriers. She stated that the
State Board of Accounting supports HB 121 and additionally
stated that it would align firm mobility with individual
mobility, as well as aligning Alaska's mobility laws with most
other states and the Uniform Accountancy Act. She thanked the
committee members for their consideration of HB 121.
4:21:38 PM
THOMAS NEILL, Chair, Uniform Accountancy Act Committee, Joint
American Institute of CPAs/National Association of State Boards
of Accountancy (AICPA/NASBA), explained that he was the current
chair of the AICPA University of Alaska Anchorage (UAA)
committee, which is joint committee of AICPA and NASBA. He
reported that there are efforts around the country to modify
model legislation in place to eliminate the 30-hour requirement
or create additional pathway that allows a bachelor's degree in
order to address the shrinking CPA population due to retirements
and firm mergers and the issue of a lack of people coming into
the profession. He stated that HB 121 would simplify the
educational requirement for CPA licensure. He stated that he
had additionally reviewed mobility requirements within HB 121
and stated that it aligned with proposed model legislation. He
concluded by stating that HB 121 would not diminish existing
public protection provisions in statute and welcomed questions
from committee members.
4:23:16 PM
REPRESENTATIVE SADDLER asked for clarification that a graduate
with a bachelor's degree in accounting was not automatically
licensed to work as an accountant.
4:23:43 PM
MS. STUART responded that an individual must have a bachelor's
degree in accounting with a minimum number of accounting-,
business-, and finance-related classes. Additionally, she
explained that an individual must pass the uniform CPA exam,
which is a national exam that contains four parts of competency-
based exams. Finally, one must also have two years of
experience working in relevant work under a licensed CPA.
REPRESENTATIVE SADDLER asked where the 30-hour requirement comes
in to the current requirements for licensure.
MS. STUART explained that an individual needs 150 credit hours.
She explained that a bachelor's degree typically consists of 120
credit hours, meaning an individual would need to take an
additional 30 hours. She noted that there was no specification
on the type of classes needed to make up the remainder 30
credits. In response to a follow-up question from
Representative Saddler, confirmed that his understanding of the
requirements was correct.
4:26:01 PM
KAREN TARVER, Former Chair/Legislative Liaison Chair, State
Board of Public Accountancy/Alaska Society of Certified Public
Accountants (AKCPA), stated she has practiced accounting in
Alaska for the past 30 years. She stated that the Alaska
Society of CPAs consists of both CPAs and CPS candidates. She
noted that the legislative committee met recently and voted in
favor of HB 121. She testified that HB 121 would modernize the
path for CPA licensure, thus allowing more people to become CPAs
in Alaska. She asserted that many of her employees had finished
their bachelor's degree with 120 credits and had challenges
getting the additional 30 credits with increasing
responsibilities and personal obligations due to student loans
or financial obligations. She further reported that many put
off getting the additional 30 credits in favor of working upon
completion of the bachelor's towards their two-year working
requirement for licensure. She shared a personal anecdote about
her son who wanted to become a CPA. She stated that HB 121
would allow licensed CPAs in other states to work in Alaska and
vice versa, noting that many clients, in Alaska or other states,
are in desperate need of licensed CPAs. She noted that firm
mobility was a long-term project of the State Board of Public
Accountancy and AKCPA. She asserted that firm mobility would
not diminish the public protection provisions in Alaska Statute
(AS). She repeated that the AKCPA was in support of HB 121.
4:29:44 PM
REPRESENTATIVE COULOMBE offered her appreciation for HB 121.
4:30:08 PM
REPRESENTATIVE CARRICK asked for clarification of the credit
hour requirement for current licensure of CPAs. She asked
whether the credit requirements necessitate an extra year of
school.
4:30:28 PM
REPRESENTATIVE SHRAGE stated that the requirements to become CPA
were found under AS 08.04.100, with the education and experience
requirements found under AS 08.04.120. He clarified that 150
credit hours are currently required, which can be made up with a
bachelor's degree in accounting or a bachelor's degree with a
concentration in accounting. He stated that, after that, an
additional 30 credit hours are required.
4:31:20 PM
REPRESENTATIVE CARRICK asked whether students in accounting
typically graduate and go back to school for the additional 30
credits or stay in school until completion of the credit hour
requirements.
REPRESENTATIVE SHRAGE shared a personal anecdote, noting that
students did a combination of both while he was a student at
UAA. He opined that the additional 30 credits do not have any
value for the students understanding of the practice of
accounting or better qualify them for accounting work.
4:32:24 PM
CO-CHAIR HALL queried the rationale behind the effective date.
4:32:32 PM
REPRESENTATIVE SHRAGE replied that January 2026 was chosen to
allow [DCCED] to make any necessary regulatory changes before
the proposed legislation would take effect.
4:32:48 PM
REPRESENTATIVE SHRAGE, in regard to a question from
Representative Saddler regarding what one cannot do without a
CPA license, replied that one cannot practice on their own
without a CPA license. He stated that an individual can work in
accounting under the supervision of CPA without meeting licensee
requirements. He stated that one cannot do that work
independently without passing the national exam for licensure
and working under a licensed CPA for two years. He further
deferred to Ms. Stuart to ensure his recollection was correct.
4:33:33 PM
MS. STUART stated that Representative Shrage's description was
accurate. She confirmed that one could not provide independent
accounting or tax services without a CPA license. She noted
that her firm will not hire anyone who is not CPA-eligible and
further stated that one could not get promoted to manager
without a license at her firm.
4:34:05 PM
REPRESENTATIVE COULOMBE asked for a fiscal note.
4:34:17 PM
MS. NDEMO stated that she would pass the fiscal note to the
committee.
REPRESENTATIVE SHRAGE stated that there was a zero fiscal note
from DCCED.
4:34:40 PM
CO-CHAIR FIELDS set an amendment deadline for HB 121.
[HB 121 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2025_03_12_HL&C_UI_101_Presentation.pdf |
HL&C 3/12/2025 3:15:00 PM |
Overview: Unemployment Insurance |
| HB 121 presentation 3.12.24.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 121 |
| HB 121 - Sectional Analysis.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 121 |
| HB 121 - Sponsor Statement.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 121 |
| HB0121A.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 121 |
| HB0123A.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 123 |
| HB123.VerA.SectionalAnalysis.3.5.25.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 123 |
| HB123.VerA.SponsorStatement.3.5.25.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 123 |
| HB123.VerA.FiscalNote.DOR.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 123 |
| HB 75 Version B Text.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 75 |
| HB 75 Sponsor Statement Version B.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 75 |
| HB 75 Sectional Analysis Version B.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 75 |
| Hb 75 Version B Summary of Changes .pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 75 |
| HB 75 Companion Bill - SB 77 Support Letter from Tote Maritime.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 75 SB 77 |
| HB 75 Companion Bill - SB 77 Support Letter from Alaska Chamber.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 75 SB 77 |
| HB 75 Companion Bill - SB 77 Support Letter from Matson.pdf |
HL&C 3/12/2025 3:15:00 PM |
HB 75 SB 77 |