02/23/2010 01:30 PM House FINANCE

HOUSE BILL NO. 315                                                                                                            
                                                                                                                                
     "An Act relating to public accounting; and providing                                                                       
     for an effective date."                                                                                                    
                                                                                                                                
                                                                                                                                
REPRESENTATIVE  KURT OLSEN, SPONSOR,  introduced his  support                                                                   
staff.                                                                                                                          
                                                                                                                                
JENNIFER   SENETTE,   STAFF,   REPRESENTATIVE   KURT   OLSEN,                                                                   
described  the creation and  intent of  the bill. House  Bill                                                                   
315 was  crafted with the help  of the Alaska State  Board of                                                                   
Public  Accountancy  and  the  Alaska  Society  of  Certified                                                                   
Public  Accountants (CPA).  She  stated that  the bill  would                                                                   
bring  Alaska in  line with  the  45 states  that had  passed                                                                   
similar versions of the legislation.                                                                                            
                                                                                                                                
1:38:47 PM                                                                                                                    
                                                                                                                                
Ms. Senette relayed that HB 315  would give CPAs mobility, or                                                                   
the ability of a licensee to gain  practice privilege outside                                                                   
his  principal  place  of  jurisdiction,  without  additional                                                                   
licensing and  fees. This would  allow licensed CPAs  and CPA                                                                   
firms in Alaska  to practice across state  jurisdictions with                                                                   
greater  ease. The  bill would  provide  for simple  majority                                                                   
ownership. Under current state  laws Alaskan accounting firms                                                                   
must  be owned  100  percent by  CPAs,  which discounted  the                                                                   
evolution  of  the  accounting  profession  over  the  years;                                                                   
accounting   firms  were   not  only   employing  CPAs,   but                                                                   
Information  Technology  professionals,  lawyers,  and  other                                                                   
non-CPA professionals.  The legislation  would dial  down the                                                                   
stringent   requirements  to   allow   for  simple   majority                                                                   
ownership.  The change  would  be helpful  in attracting  and                                                                   
retaining  new talent  in the  state.  The legislation  would                                                                   
also enhance  the board  of public  accountancies ability  to                                                                   
protect the  public interest. Under  HB 315 the  Alaska State                                                                   
Board   of   Public   Accountancy    would   have   automatic                                                                   
jurisdiction over any CPAs practicing in the state.                                                                             
                                                                                                                                
1:40:48 PM                                                                                                                    
                                                                                                                                
Ms. Senette  explained that  if a  CPA from out-of-state  was                                                                   
working in Alaska, the state board  of public accountancy had                                                                   
the jurisdiction to address any violations of the standard.                                                                     
                                                                                                                                
Representative  Fairclough  wondered  if accountants  in  the                                                                   
state could  expand multi-nationally. Ms.  Senette redirected                                                                   
the question to the CPAs present for questioning.                                                                               
Co-Chair Stoltze opened public testimony.                                                                                       
                                                                                                                                
LISA ROGERS, ALASKA SOCIETY OF  CERTIFIED PUBLIC ACCOUNTANTS,                                                                   
ANCHORAGE (via  teleconference), testified in support  of the                                                                   
legislation.  She stated  that  the bill  had generated  from                                                                   
conversations among  accountants who had worked  to draft the                                                                   
legislation.                                                                                                                    
                                                                                                                                
Representative Fairclough  wondered about push  back from the                                                                   
state  of  New York,  as  similar  legislation had  not  been                                                                   
enacted there.                                                                                                                  
                                                                                                                                
1:45:02 PM                                                                                                                    
                                                                                                                                
Ms.  Rogers replied  that New  York  had been  slow to  adopt                                                                   
changes in  the area of public  accounting. She did  not know                                                                   
why.                                                                                                                            
                                                                                                                                
JULIE OLSEN,  PRESIDENT, ALASKA  SOCIETY OF CERTIFIED  PUBLIC                                                                   
ACCOUNTANTS, urged support for the legislation.                                                                                 
                                                                                                                                
1:46:40 PM                                                                                                                    
                                                                                                                                
Representative Fairclough  reiterated her earlier  questions.                                                                   
Ms. Olsen deferred the questions to Max Mertz.                                                                                  
                                                                                                                                
1:47:29 PM                                                                                                                    
                                                                                                                                
MAX MERTZ, BOARD  OF PUBLIC ACCOUNTING, JUNEAU,  replied that                                                                   
the  legislation pertained  only  to CPAs  within the  United                                                                   
States and U.S.  territories. He furthered that  the State of                                                                   
New York had laws on the book  relating to public accountancy                                                                   
that dated back  to the 19th century that had  yet to change.                                                                   
He reiterated  that  New York  had been very  slow to  change                                                                   
practices concerning public accounting.                                                                                         
                                                                                                                                
Representative Fairclough asked  for explanation of "practice                                                                   
privilege". Mr.  Mertz replied that "practice  privilege" was                                                                   
distinguishable from "practice  permit". Mr. Mertz explained:                                                                   
                                                                                                                                
"When  there  is  a  CPA  in  Alaska  practicing  in  another                                                                   
mobility  state, or from  another state  practicing here,  if                                                                   
they are  serving a client that  does not have a  home office                                                                   
in Alaska, that  might have some incidental  operations here,                                                                   
and they  are based out-of-state,  so it's really  incidental                                                                   
practices.  They can come  to Alaska,  or over the  internet,                                                                   
provide those services  without having to come  to Alaska and                                                                   
get a practice permit, which is  currently required, and will                                                                   
continue  to be required,  if  the client either  has a  home                                                                   
office here,  or the practice  is other than  incidental. The                                                                   
premise  of mobility  is to  allow  this interstate  practice                                                                   
without  having  to  go  through the  process  of  getting  a                                                                   
permit."                                                                                                                        
                                                                                                                                
1:51:47 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
Representative  Austerman wondered  if  there was  a way  the                                                                   
bill  could  allow  the  state  to  access  out-of-state  CPA                                                                   
licensing information,  before allowing them to  practice in-                                                                   
state.                                                                                                                          
                                                                                                                                
Mr. Mertz said there was a companion  bill circulating called                                                                   
the Accountants Licensing Database,  which would focus on the                                                                   
issue.                                                                                                                          
                                                                                                                                
1:53:31 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze closed public testimony.                                                                                       
                                                                                                                                
Co-Chair  Stoltze   recognized  the  zero  fiscal   note  and                                                                   
solicited amendments.                                                                                                           
                                                                                                                                
1:54:12 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hawker  MOVED  to  REPORT   HB315  26-LS130\A  from                                                                   
committee. There being no OBJECTION it was so ordered.                                                                          
                                                                                                                                
HB  315  was REPORTED  OUT  of  committee  with a  "do  pass"                                                                   
recommendation and accompanying fiscal note.                                                                                    
                                                                                                                                
1:55:44 PM