02/25/2008 03:00 PM House LABOR & COMMERCE

HB 379-CPA EDUCATION REQUIREMENTS                                                                                             
                                                                                                                                
3:18:08 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  announced that  the next order  of business  would be                                                              
HOUSE BILL NO.  379, "An Act relating to  educational requirements                                                              
for licensure as a certified public accountant."                                                                                
                                                                                                                                
REPRESENTATIVE  MIKE  HAWKER,  Alaska  State  Legislature,  stated                                                              
that HB 379 adds  transitional language to correct  a problem that                                                              
resulted from  passage of HB 274  in 2006, which was a  rewrite of                                                              
the  Certified  Public  Accountant's   (CPA)  licensure  statutes.                                                              
Once  the statutes  were  applied  to  the actual  practice,  some                                                              
imperfections   arose.     The  omnibus   bill  that  passed   the                                                              
legislature  in 2006  moved  Alaska much  closer  to the  national                                                              
standards  for CPAs.   Previously  in  the state,  a person  could                                                              
become licensed as  a CPA by obtaining an accounting  degree at an                                                              
accredited   university,   working  for   two   years  under   the                                                              
supervision  of  a  licensed  CPA,   and  passing  the  qualifying                                                              
examination.    However, prior  to  passage  of  HB 274  in  2006,                                                              
people   could   get   licensed   without   first   obtaining   an                                                              
undergraduate  degree  in accounting.    Thus,  a person  with  an                                                              
undergraduate  degree,  other  than  accounting,  could  meet  the                                                              
other  requirements,  including  passage  of  the  uniform  public                                                              
accounting examination,  but was also  required to work  for three                                                              
years  under  the  supervision  of  a  licensed  CPA.    The  bill                                                              
neglected to  phase out those people  who acquired a  degree other                                                              
than accounting,  such  as in finance,  who planned  on using  the                                                              
three years of experience  to become a CPA.  Thus,  the bill would                                                              
essentially   "grandfather   in"   people   who   received   their                                                              
baccalaureate  degrees prior to  January 1,  2008.  Those  seeking                                                              
licensure as  CPAs, who receive  their baccalaureate  degree after                                                              
January  1,   2008,  will  be  required   to  have  a   degree  in                                                              
accounting.   He related that this  change is wholly  supported by                                                              
the Alaska Board of Public Accountancy.                                                                                         
                                                                                                                                
3:22:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LEDOUX  inquired  as  to  whether  people  with  a                                                              
degree such as paleontology or biology seek CPA licensure.                                                                      
                                                                                                                                
REPRESENTATIVE HAWKER  answered that it is possible,  but that the                                                              
individual would still have to pass the stringent national exam.                                                                
                                                                                                                                
REPRESENTATIVE  HAWKER  in  response   to  Representative  Neuman,                                                              
explained that the  board could provide a  specific interpretation                                                              
of baccalaureate  degrees including foreign degrees  that would be                                                              
considered as equivalent.                                                                                                       
                                                                                                                                
3:25:42 PM                                                                                                                    
                                                                                                                                
MAX MERTZ,  CPA, Chair, Board  of Public Accountancy,  Division of                                                              
Corporations,  Business,  and Professional  Licensing,  Department                                                              
of  Commerce,  Community,  &  Economic   Development  (DCCED),  in                                                              
response  to Representative  LeDoux,  explained  that people  with                                                              
non-business  degrees  generally return  to  college  to take  the                                                              
requisite  hours  in  accounting   courses  prior  to  taking  the                                                              
qualifying examination.   He opined it would be  very difficult to                                                              
pass the CPA exam  without a foundation in accounting.   The board                                                              
supported phasing  out the three  year experience option  in order                                                              
to ensure  that the person taking  the exam holds  a baccalaureate                                                              
degree in accounting.                                                                                                           
                                                                                                                                
3:26:34 PM                                                                                                                    
                                                                                                                                
MR.  MERTZ, in  response  to  Representative Gatto,  offered  that                                                              
certification  is   valid,  subject  to  biennial   renewal  which                                                              
includes   continuing  education   for   CPAs.     Once  the   CPA                                                              
examination  is  taken,  it  does  not have  to  be  taken  again.                                                              
However,  a  licensee  can  elect  to  place  their  license  into                                                              
inactive  status.    When  the   licensee  decides  to  reactivate                                                              
his/her license,  they would be required to pay  back registration                                                              
fees  and meet  continuing education  requirements  of 120  hours.                                                              
In   further  response   to  Representative   Neuman,  Mr.   Mertz                                                              
explained  the   baccalaureate  equivalency  relates   largely  to                                                              
foreign   candidates.     Since   many  countries   do  not   have                                                              
baccalaureate degrees,  candidates submit their foreign  degree to                                                              
one of  several organizations  that evaluate  it against  the U.S.                                                              
baccalaureate degree  for equivalency.  The  organization provides                                                              
the  candidate  with  a  certificate   of  equivalency,  which  is                                                              
accepted  by the  board.   In further  response to  Representative                                                              
Neuman, Mr.  Mertz advised that  the foreign candidate  must still                                                              
pass the national qualifying CPA exam.                                                                                          
                                                                                                                                
3:29:19 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON,  after first  determining no  one wished  to testify,                                                              
closed public testimony on HB 379.                                                                                              
                                                                                                                                
3:30:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER moved to  report HB  379 out of  committee                                                              
with  individual  recommendations   and  the  accompanying  fiscal                                                              
notes.   There being no  objection, HB  379 was reported  from the                                                              
House Labor and Commerce Standing Committee.