Legislature(2005 - 2006)HOUSE FINANCE 519

02/09/2006 01:30 PM House FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 274 PUBLIC ACCOUNTANTS TELECONFERENCED
Moved CSHB 274(FIN) Out of Committee
+ HB 318 LIMITATION ON EMINENT DOMAIN TELECONFERENCED
Moved CSHB 318(FIN) Out of Committee
+ HB 334 MUNICIPAL PROPERTY TAX DEFERRAL/EXEMPTION TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
1:45:29 PM                                                                                                                    
HOUSE BILL NO. 274                                                                                                            
                                                                                                                                
          An  Act relating  to the  practice of  accounting;                                                                    
          and providing for an effective date.                                                                                  
                                                                                                                                
Vice Chair  Stoltze MOVED to ADOPT  work draft #24-LS0176\C,                                                                    
Bannister, 2/8/06, as the version  of the legislation before                                                                    
the Committee.   (Copy on  File).   Representative Weyhrauch                                                                    
OBJECTED.                                                                                                                       
                                                                                                                                
1:46:44 PM                                                                                                                    
                                                                                                                                
Representative Weyhrauch WITHDREW his  OBJECTION in order to                                                                    
hear the proposed changes  brought forward by Representative                                                                    
Hawker.   There being NO  further OBJECTION, the  work draft                                                                    
was adopted.                                                                                                                    
                                                                                                                                
REPRESENTATIVE   HAWKER,   SPONSOR,   explained   that   the                                                                    
committee substitute resulted from  a review by the Division                                                                    
of  Occupational Licensing.    The  Division made  technical                                                                    
corrections  providing  the  version  currently  before  the                                                                    
Committee.                                                                                                                      
                                                                                                                                
Representative Hawker spoke to the  basis of the bill, which                                                                    
updates  the  Alaska   statutory  framework  regulating  the                                                                    
professional practices  of accounting.   The bill  moves the                                                                    
statues  toward the  standardized  structure recommended  in                                                                    
the model of the  National Uniform Accountancy Act developed                                                                    
by the  American Institute  of Certified  Public Accountants                                                                    
(AICPA).                                                                                                                        
                                                                                                                                
Representative Hawker  advised that adoption of  the changes                                                                    
would:                                                                                                                          
                                                                                                                                
   Facilitate the practice of Alaska public accountants                                                                      
     in other jurisdictions,                                                                                                    
     Ensure that qualifications of non-resident public                                                                       
     accountants practicing in Alaska, and                                                                                      
    Aid conduct of interstate commerce.                                                                                      
                                                                                                                                
The changes are important to  keep Alaska competitive in the                                                                    
international business environment  and provide the greatest                                                                    
possible  consumer protection  for the  public relying  upon                                                                    
the work performed by Certified Public Accountants (CPA).                                                                       
                                                                                                                                
Representative Hawker highlighted what the bill would                                                                           
accomplish:                                                                                                                     
                                                                                                                                
    Increases the supervision and regulation of public                                                                       
     accountants who provide auditing services;                                                                                 
    Establishes a mechanism to grant temporary practice                                                                      
     privileges to public accountants and public accounting                                                                     
     firms licensed in other states;                                                                                            
    Expands peer quality review requirements; and                                                                            
     Ensures that public accountants meet appropriate                                                                        
     education and experience standards.                                                                                        
                                                                                                                                
1:53:32 PM                                                                                                                    
                                                                                                                                
Representative Hawker  noted that  there had been  a lengthy                                                                    
discussion  in  the  House   Labor  and  Commerce  Committee                                                                    
regarding concerns by non-licensed  accountants.  He pointed                                                                    
out the "do pass" recommendations from that Committee.                                                                          
                                                                                                                                
1:54:08 PM                                                                                                                    
                                                                                                                                
Vice  Chair  Stoltze inquired  if  there  were "issues"  for                                                                    
CPA's regarding  license and non-licensure.   Representative                                                                    
Hawker   addressed  the   difference   between  a   licensed                                                                    
accountant  and a  non-licensed  one.   The  key points  for                                                                    
obtaining CPA licensing are:                                                                                                    
                                                                                                                                
    A minimum education requirements with a degree in                                                                        
     accounting,                                                                                                                
    Passing the uniform certified public accountant                                                                          
     certification, and                                                                                                         
    Applying to the Board to practice as a CPA.                                                                              
                                                                                                                                
To  actually  perform  audits requires  further  experience;                                                                    
there  is an  apprenticeship  appointment.   There are  non-                                                                    
licensed  record  keepers.     Currently,  there  is  little                                                                    
regulation  of  the  work product.    Representative  Hawker                                                                    
pointed out  that Alaska  has some  of the  "least stringent                                                                    
regulations"  of  any  state  in the  Nation,  which  is  of                                                                    
concern  to the  licensed accounting  profession.   The bill                                                                    
would not impinge any non-certified accountants.                                                                                
                                                                                                                                
1:58:13 PM                                                                                                                    
                                                                                                                                
Vice  Chair  Stoltze asked  the  percentage  of people  that                                                                    
initially,  fail the  CPA  examine.   Representative  Hawker                                                                    
thought  that those  passing the  test the  first time  fell                                                                    
into the 25% range.  He  acknowledged that it is a difficult                                                                    
test  to pass,  adding that  his class  set a  national pass                                                                    
record at 67% graduates succeeding.                                                                                             
                                                                                                                                
1:59:01 PM                                                                                                                    
                                                                                                                                
Representative Holm inquired whose  responsibility it was to                                                                    
regulate the service.                                                                                                           
                                                                                                                                
1:59:35 PM                                                                                                                    
                                                                                                                                
Representative Hawker  responded that was a  function of the                                                                    
State's  Board   of  Accountancy.    The   Governor,  as  an                                                                    
independent body, appoints that Board.   He added that there                                                                    
are stipulations regarding the composition of the board.                                                                        
                                                                                                                                
2:00:21 PM                                                                                                                    
                                                                                                                                
Representative Weyhrauch  inquired if the  legislation would                                                                    
affect  "bookkeepers".   Representative Hawker  responded it                                                                    
would not.                                                                                                                      
                                                                                                                                
2:01:02 PM                                                                                                                    
                                                                                                                                
Representative  Weyhrauch noted  that there  are people  who                                                                    
advertise    themselves    as   a    bookkeeping    service.                                                                    
Representative Hawker stated that they  would not be able to                                                                    
express  or  imply  that  they  have  special  knowledge  or                                                                    
competence  issuing any  report on  the books.   There  is a                                                                    
100%  exclusion  on  bookkeeping.    The  substance  on  the                                                                    
bookkeeping work is where it crosses the professional line.                                                                     
                                                                                                                                
2:02:02 PM                                                                                                                    
                                                                                                                                
LISA  ROGERS,  (TESTIFIED   VIA  TELECONFERENCE),  CERTIFIED                                                                    
PUBLIC ACCOUNTANT  (CPA), ALASKA  SOCIETY OF  CPA'S (ASCPA),                                                                    
ANCHORAGE, testified  that the legislation provides  a much-                                                                    
needed  update and  revision to  the statutes  governing the                                                                    
practice of public accounting.   The National Association of                                                                    
the  State Board  of Accountancy  (NASBA)  and the  American                                                                    
Institute  of  Institute  of  Certified  Public  Accountants                                                                    
(AICPA)  drafted the  Uniform Accountancy  Act.   She stated                                                                    
that  both   organizations  participated  in   drafting  and                                                                    
reviewing the  proposed legislation.   She urged  support of                                                                    
HB 274.                                                                                                                         
                                                                                                                                
2:03:38 PM                                                                                                                    
                                                                                                                                
Representative Hawker applauded Ms.  Rogers for the work she                                                                    
provided on the drafting process.                                                                                               
                                                                                                                                
2:04:10 PM                                                                                                                    
                                                                                                                                
DON  RULIEN,   (TESTIFIED  VIA   TELECONFERENCE),  CHAIRMAN,                                                                    
CERTIFIED  PUBLIC ACCOUNTANT  (CPA), LEGISLATIVE  COMMITTEE,                                                                    
ALASKA  SOCIETY OF  CPA'S  (ASPCA),  ANCHORAGE, pointed  out                                                                    
that the policy by which an  accountant becomes a CPA is not                                                                    
being changed.  The intent  was to address language and make                                                                    
it more  uniform so that  accountants can practice  in other                                                                    
states  without  a  lot  of   trouble.    Mr.  Rulien  noted                                                                    
statewide  support of  the legislation.   He  requested that                                                                    
the legislation move from Committee as soon as possible.                                                                        
                                                                                                                                
2:05:54 PM                                                                                                                    
                                                                                                                                
ROBLYN  WEIBE,  (TESTIFIED VIA  TELECONFERENCE),  PRESIDENT,                                                                    
ALASKA SOCIETY OF INDEPENDENT  ACCOUNTANTS (ASIA)   NORTHERN                                                                    
CHAPTER,  ANCHORAGE, voiced  appreciation  for the  proposed                                                                    
legislation and urged its' consideration  on behalf of ASIA.                                                                    
She  noted  that  ASIA  helps  to  maintain  a  professional                                                                    
expertise amongst accountants.                                                                                                  
                                                                                                                                
2:08:08 PM                                                                                                                    
                                                                                                                                
Representative   Kerttula  noticed   that  the   reprocosity                                                                    
requirement  was  being  changed  from five  years  to  four                                                                    
years;  she  asked  if  that   was  the  national  standard.                                                                    
Representative Hawker stated it was.                                                                                            
                                                                                                                                
Representative  Hawker MOVED  to  ADOPT Amendment  #1.   Co-                                                                    
Chair Meyer OBJECTED for purposes of discussion.                                                                                
                                                                                                                                
Representative  Hawker  explained  that  the  amendment  was                                                                    
brought forward  by Department of  Law for a  language clean                                                                    
up and does not make substantive changes.                                                                                       
                                                                                                                                
     Page 10: Delete (b) and insert (c)                                                                                         
     Page 15, Line 6:  Delete "required by" and                                                                                 
                       Insert "under"                                                                                           
     Page 17, Line 21: Insert "[or suspension]"                                                                                 
                                                                                                                                
2:10:25 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  WITHDREW his  OBJECTION.    There being  NO                                                                    
further OBJECTION, Amendment #1 was adopted.                                                                                    
                                                                                                                                
2:10:46 PM                                                                                                                    
                                                                                                                                
Vice Chair  Stoltze MOVED to REPORT  CS HB 274 (FIN)  out of                                                                    
Committee  with  individual  recommendations  and  with  the                                                                    
accompanying zero  note.  There  being NO OBJECTION,  it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CS HB  274 (FIN) was  reported out  of Committee with  a "do                                                                    
pass" recommendation and with a  zero note by the Department                                                                    
of Commerce, Community & Economic Development.                                                                                  
                                                                                                                                
                                                                                                                                
2:11:20 PM                                                                                                                    
                                                                                                                                
AT EASE:       2:11:36 PM                                                                                                     
RECONVENE:          2:17:11 PM                                                                                                
                                                                                                                                

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