Legislature(2017 - 2018)SENATE FINANCE 532
04/18/2018 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB147 | |
| HB216 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 62 | TELECONFERENCED | |
| + | HB 147 | TELECONFERENCED | |
| + | HB 216 | TELECONFERENCED | |
| + | TELECONFERENCED |
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 147
"An Act relating to the Board of Public Accountancy;
relating to the licensure of public accountants; and
relating to the practice of public accounting."
9:09:33 AM
REPRESENTATIVE STEVE THOMPSON, SPONSOR, stated that HB 147
had come about when members of the Board of Public
Accountancy had contacted his office. He read from the
Sponsor Statement (copy on file):
The National Association of State Boards of
Accountancy (NASBA) and the American Institute of
Certified Public Accountants (AICPA) provided the
Alaska Board of Public Accountancy under the
Department of Commerce, Community, and Economic
Development with a summary of areas where the Alaska
statutes and regulations for public accountancy differ
from the Uniform Accountancy Act or AICPA's Code of
Professional Conduct.
The proposed statute changes will align the Alaska
statutes and regulations for public accountancy with
these national organizations.
9:12:25 AM
LYNETTE BERGH, STAFF, REPRESENTATIVE STEVE THOMPSON,
discussed the Sectional Analysis (copy on file):
Section 1. Amends AS 08.04.080 Removes requirement
for the board to mail full paper copies to every
licensee/interested party to notice proposed rules or
amendments.
Section 2. Amends AS 08.04.110 Removes minimum age
requirement.
Section 3. Amends AS 08.04.195(a) Removes the number
of years of prior public accounting experience and
examination for out-of-state applicants as the
applicants must meet accounting experience
requirements as established by the Board by
regulation.
Section 4. Amends AS 08.04.565 - Adds a new section
that delineates prohibited acts. An individual under
AS 08.04.105 may not perform attest functions through
a partnership, limited liability company, corporation
or other business entity unless those groups mentioned
above hold a valid permit under AS 08.04.240.
Section 5. Amends AS 08.04.622Amends the exceptions
to confidential communication by adding information
that is disclosed under applicable state or federal
laws or as required by the Public Company Accounting
Oversight Board.
Section 6. Amends AS 08.04.680(1) by expanding the
definition of "attest function" to include procedures
in accordance with the standards developed by national
accountancy organizations and adopted by the board in
regulation.
Section 7. AS 08.04.680(19) is amended by clarifying
the definition of "report". The definition was also
amended to conform with the drafting rules.
Section 8. Amends AS 08.04.680(20) definitions for
"state" by adding the Northern Mariana Islands and
clarifying language for the United States Virgin
Islands.
Section 9. Repeals AS 08.04.120(b), 08.04.180,
08.04.580, 08.04.590, 08.40.595 and 08.04.598.
Co-Chair MacKinnon asked about Section 9 of the bill and
what was being repealed.
9:15:43 AM
AT EASE
9:16:27 AM
RECONVENED
Ms. Bergh confirmed that AS 08.04.120(b) pertained to
education and experience requirements; AS 08.04.180
referenced applicant license requirements; AS 08.04.580
pertained to partnership posing as accountants; 08.04.590
dealt with a corporation using a name without a current
permit; 08.40.595 pertained to use of a title with limited
liability; and 08.04.598 had to do with a title, name or
other legal entity.
Co-Chair MacKinnon asked about the rationale for repealing
the sections listed. She understood that the change related
to educational experience.
Ms. Bergh asked to defer the question to a board member.
KAREN TARVER, STATE BOARD OF PUBLIC ACCOUNTANCY, JUNEAU
(via teleconference), informed that she was in her fifth
year as a member of the board. She detailed that the
section pertaining to prior applicants was a carry-over
that was outdated and no longer required due to new
regulations.
Co-Chair MacKinnon asked if there were working accountants
that the statute applied to.
Ms. Tarver stated that the section would be relevant to
applicants that had applied for licensure before 1960 and
pertained to taking the exam. The exception was related to
the number of credits required to take the exam and was no
longer needed to apply to current standards.
Co-Chair MacKinnon asked if Ms. Tarver could speak to the
other sections proposed to be repealed.
Ms. Tarver stated that the remaining sections proposed for
repeal were all related to the use of names. With the new
proposed section, the entities were lumped together rather
than having separate sections.
9:20:42 AM
Senator Stevens asked for clarification on the repeal of
sections relating to educational requirements.
Ms. Tarver elucidated that the bill did not repeal
educational requirements. Rather, the bill proposed to
remove the particular exception for applicants prior to
1960. The current educational requirement was for
applicants to have 150 semester hours. The board had felt
that the group of people the exception had applied to had
decreased over time.
Co-Chair MacKinnon surmised that 08.04.120(b) was a two-
part section on educational requirements, and the 150 hours
were still required. Section (b) was proposed to be
removed, was related to the exception for those that had
applied prior to 1960.
Ms. Tarver answered in the affirmative.
Co-Chair MacKinnon asked if AS 08.04.120 remained in
statute and read from existing statute:
The education and experience requirements for an
applicant are a baccalaureate degree or its equivalent
conferred by a college or university acceptable to the
board and additional semester hours or post-
baccalaureate study so that the total educational
program includes at least 150 hours, with an
accounting concentration or equivalent as determined
by the board by regulation to be appropriate, and two
years of accounting experience satisfactory to the
board.
9:24:03 AM
Senator Stevens wondered if the sponsor could elaborate on
the proposed changes to the educational requirements. He
asked about the definition of an acceptable institution and
assumed it would be accredited.
Representative Thompson stated that there were some older
regulations that allowed for Certified Public Accountant
(CPA) applicants prior to 1960 to apply without meeting the
established educational requirements. He discussed the
current educational requirements.
Mr. Tarver stated that Representative Thompson was correct.
She offered to provide a list of acceptable institutions,
which were based on the guidelines by NASBA and AICPA.
Vice-Chair Bishop observed that there could be an
accounting recruiting problem in the state. He referenced
Section 2 and Section 3 of the bill. He wondered if the
board was trying to use best practices to shore up the
shortfall in the profession.
Representative Thompson thought the bill was repealing
older exceptions and had also incorporated new standards.
9:27:34 AM
CHUCK JOHNSON, STATE BOARD OF ACCOUNTANCY, FAIRBANKS (via
teleconference), addressed the comments by Vice-Chair
Bishop. He informed that there were about 54 jurisdictions
that administered the CPA test. He furthered that Section 3
of the bill would allow for more mobility between states.
He thought the bill was a cleanup of reciprocity. He opined
that older regulations had been more restrictive, and the
bill would increase mobility of out-of-state accountants in
Alaska. At statehood it was possible to pass the CPA exam
without going to college. He thought that removing the
exception would not affect potential license applicants.
9:30:09 AM
Vice-Chair Bishop understood reciprocity and thanked Mr.
Johnson for his comments.
Mr. Johnson spoke to Section 4 and noted that the statutes
had evolved as corporations and partnerships were formed.
He discussed the changes and updates to statutes over time.
He referenced the fiscal note and stated that the board was
trying to be consistent with other boards in the state. He
discussed the expenses of mailing regulation updates and
the utility of the internet.
Co-Chair MacKinnon asked if Mr. Johnson was in favor of the
bill.
Mr. Johnson answered in the affirmative. He stated that the
board was unanimous in support of the bill.
Co-Chair MacKinnon stated that her staff had experience
with a previous bill in 2008, which had adopted new
standards and put in a grandfather clause provision for
those that were completing degrees.
9:33:00 AM
Co-Chair MacKinnon OPENED public testimony.
KAREN TARVER, STATE BOARD OF PUBLIC ACCOUNTANCY, JUNEAU
(via teleconference), testified in support of the bill. She
stated that the board worked closely with the Alaska
Society of CPAs.
9:34:13 AM
DON RULIEN, FORMER CHAIR, STATE BOARD OF PUBLIC
ACCOUNTANCY, ANCHORAGE (via teleconference), spoke in
support of the bill. He relayed that the board had been
working on the changes for almost two years. The board had
worked closely with the Alaska Society of CPAs to ensure
that all parties were in accord with the proposed changes.
9:35:14 AM
Co-Chair MacKinnon CLOSED public testimony.
Vice-Chair Bishop discussed FN 1 from the Department of
Commerce, Community and Economic Development (DCCED). The
cost in FY 19 would be $4,000. He read from the Analysis on
page 2 of the fiscal note:
If the bill passes, the following expenses will be
incurred:
Services: $4.0 (printing, postage and legal costs for
regulation project)
Professional licensing programs within the Division of
Corporations, Business and Professional Licensing are
funded by Receipt Supported Services, fund source 1156
Rcpt Svcs (DGF). Licensing fees for each occupation
are set per AS 08.01.065 so the total amount of
revenue collected approximately equals the
occupation's actual regulatory costs.
Co-Chair MacKinnon noted that there was an error in the
fiscal note.
Representative Thompson disclosed that his wife was a CPA
and a past member of the board.
Co-Chair MacKinnon asked for clarification on the fiscal
note. She wondered if there was an inaccurate title.
SARA CHAMBERS, DIVISION OF CORPORATIONS, BUSINESS, AND
PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE, COMMUNITY
AND ECONOMIC DEVELOPMENT, was not aware of an error in the
fiscal note.
9:38:17 AM
AT EASE
9:38:22 AM
RECONVENED
Co-Chair MacKinnon clarified that there was not an error on
the fiscal note.
Co-Chair MacKinnon asked if there had been feedback on the
repeal of a section that required a copy of proposed
regulations be mailed to all licensees, or if there was
general understanding and acceptance from people in the
field.
Ms. Chambers answered in the affirmative. She stated that
the bill would bring the board's regulations in line with
others in the division. She stated that the division would
continue to mail a one-page alert to relevant licensees and
interested parties. The proposed change would provide
modernization, had been vetted by the Department of Law
(DOL), and had received no negative feedback.
Co-Chair MacKinnon stated that her office had received
regulation review notifications frequently, and it was hard
to follow what transpired. She was not sure that condensing
information to one page would be advantageous.
Ms. Chambers stated that the division's goal was to make
the public processes engaged in by the board to be as
transparent as possible. With the action described, the
division would provide more information online that had
explanations in plain language. One of her goals was to
continue to make the process adhere to best practices and
avoid the sentiments that Co-Chair MacKinnon had described.
She relayed that the division had recently added a second
regulations specialist after having only one on staff. She
expressed a desire to work with Co-Chair MacKinnon and her
staff to glean more feedback.
Co-Chair MacKinnon appreciated Ms. Chambers'
responsiveness. She elaborated that confusion could be
caused by providing incomplete information regarding
regulation changes.
9:41:35 AM
Senator Stevens asked for a brief explanation of the board
members' experience and length of term.
Ms. Chambers believed the board had 7 members. All boards
were made up of a mix of licensees and public members. All
boards had a limitation of two terms served without a break
in service. Board members could then be appointed at a
later time if there was a break in service.
Co-Chair MacKinnon asked if Mr. Johnson could confirm the
terms.
Ms. Johnson had been on the board for 7 years and would end
his second term on the Board of Accountancy the following
February. He believed that two other members were serving
second terms as well.
Senator Stevens asked about term limits. He surmised that a
board member could serve for two four-year terms before
having to take a term off.
Mr. Johnson agreed. There was a public member from
Kotzebue. He stated that the board endeavored to have
diverse geographical representation within the state.
SSHB 147 was HEARD and HELD in committee for further
consideration.
Co-Chair MacKinnon set aside SSHB 147. She asked members to
submit proposed amendments or concerns by noon.
9:45:08 AM
AT EASE
9:48:23 AM
RECONVENED