Legislature(1995 - 1996)
03/19/1996 01:32 PM Senate L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE LABOR AND COMMERCE COMMITTEE March 19, 1996 1:32 P.M. MEMBERS PRESENT Senator Tim Kelly, Chairman Senator John Torgerson, Vice Chairman Senator Jim Duncan Senator Judy Salo MEMBERS ABSENT Senator Mike Miller COMMITTEE CALENDAR SENATE BILL NO. 305 "An Act relating to the regulation of accountants; and amending the effective date for sec. 6, ch. 62, SLA 1991." SENATE BILL NO. 276 "An Act relating to the calculation of unemployment insurance benefits; and providing for an effective date." CS FOR SENATE BILL NO. 229(CRA) "An Act relating to employment contributions and to the state training and employment program; and providing for an effective date." PREVIOUS SENATE COMMITTEE ACTION SB 305 - No previous action to consider. SB 276 - See Labor and Commerce minutes dated 2/22/96 and 3/14/96. SB 229 - See Community & Regional Affairs minutes dated 2/7/96, 2/12/96, 2/21/96, and 3/18/96. See Labor & Commerce minutes dated 3/14/96. WITNESS REGISTER Chuck Griffin, Chairman State Board of Public Accountants P.O. Box 670 Palmer, AK 99645 POSITION STATEMENT: Supported SB 305. Catherine Reardon, Director Division of Occupational Licensing Department of Commerce and Economic Development P.O. Box 110806 Juneau, AK 99811-0806 POSITION STATEMENT: Supported SB 305 as amended. Dwight Perkins, Special Assistant Department of Labor P.O. Box 33922 Juneau, AK 99801 POSITION STATEMENT: Supported SB 229 and SB 276. Ron Torgerson Division of Employment Security Department of Labor P.O. Box 25509 POSITION STATEMENT: Commented on SB 229 and SB 276. ACTION NARRATIVE TAPE 96-20, SIDE A Number 001 SB 305 REGULATION OF ACCOUNTANTS CHAIRMAN KELLY called the Senate Labor and Commerce Committee meeting to order at 1:32 p.m. and announced SB 305 to be up for consideration. CHUCK GRIFFIN, Chairman of the State Board of Public Accountancy, said SB 305 makes three changes in the Accountancy Act. One is to defer and provide transition for the 150 hour education requirement. This is mostly on behalf of the University community whose students will be graduating in the next year or two and hope to become licensed. The second change would give the Board the statutory authority to recognize for permit purposes limited liability companies which are now permitted under AS10.50. There is now no provision to recognize that entity for licensing. The third change would provide a limited form of permissive reciprocity for licensing CPA's who come from other states in the form of a five in 10 rule reflecting examination and experience. This will streamline the licensing process when these people move to Alaska or are transferred by their firms. He noted that two amendments are needed. In section one, dealing with the reciprocity provision, currently reads "an applicant passes a public accounting examination" and it should read "the applicant has passed the uniform certified public accountants examination." This conforms the title to the examination that is referred to nationally and in our statutes, he said. The other change is on page 10, the educational experience requirement, where "in public accounting" needs to be deleted because there is no requirement for a public accounting degree which would not be uniformly awarded anyway. Number 181 SENATOR KELLY asked why he wanted section 6 to take effect January 1, 2001 which is a ways from now. MR. GRIFFIN replied that they are currently the 1991 Act which has an effective date of September 1, 1997 and they have received a number of requests from primarily University students who feel that 1997 puts us ahead of the national curve and, secondly, the 1991 Act didn't allow for any transition whereby a person, if they had a degree prior to 1997, could still qualify. He said the Department of Law said that only the legislature can enact that provision; the Board couldn't adopt any regulation to provide any transition or grandfathering. SENATOR TORGERSON asked on page 9, line 25 regarding the definition of a foreign limited liability company and he wanted to know why we would identify them. MR. GRIFFIN replied that foreign under the limit liability law does not mean outside the U.S.; it means an LLC which is not directly domiciled in Alaska. They have had to deal with the same provision with respect to professional corporations. It is basically a form of interstate reciprocity. SENATOR SALO moved on page 1, line 9 to change the term to the uniform certified public accountant examination and on page 10, lines 14 and 15 to delete the words "in public accounting." CATHERINE REARDON, Division of Occupational Licensing, said that the administration they supported the bill with the changing of the wording. There were no objections to the amendments and they were adopted. SENATOR TORGERSON moved to pass CSSB 305 from committee with individual recommendations. There were no objections and it was so ordered. SB 276 CALCULATION OF UNEMPLOYMT INS BENEFITS SB 229 STATE TRAINING & EMPLOYMENT PROGRAM SENATOR KELLY announced SB 276 and SB 229 to be up for consideration. DWIGHT PERKINS, Special Assistant, Department of Labor, supported SB 229. SENATOR KELLY said he wanted to combine the two bills under SB 229. He said there had been some questions about restructuring the insurance payments on the Unemployment Insurance Program to allow the employee to pay a larger share of the proposed increase. He noted there was a letter from the Department of Labor called the Employer and Employee Contribution proposal which caps the weekly benefit amount at $248. MR. PERKINS discussed the letter for the committee. He said that right now the current level based on 70% of the average annual Alaska wage is $22,500. That equates to $212 per week for unemployment. The proposal today increases the benefit by $2 for every $250 increase in wage. The maximum unemployment would be capped at $248 per week. He said this would be locked in statute, not to be changed until some future date. SENATOR KELLY remarked that the $212 in the original Governor's bill had been replaced with the $248 minimum. MR. PERKINS also commented on the step program saying that originally the program would be institutionalized. There were concerns with that in the Department of Labor and the Department of Community and Regional Affairs and a two year sunset provision was established. The amount of administrative expenses would be capped to 20 percent of the total amount of the step dollars coming into the program. That 20 percent would be less the agreement that the Department of Labor has with the federal Office of Management and Budget entitled Circular A87, Cost Principles for State and Local Governments. That would be outside the cap. MR. Perkins said they receive funds from the Alaska Human Resource Investment Council, Community and Regional Affairs, Department of Labor (non-resident hire report), Municipality of Anchorage and Fairbanks (service delivery areas). All those cannot exceed 20 percent excluding the $250,000 in the Circular A87. SENATOR KELLY remarked that that was a real cap of about 26 or 27 percent. MR. PERKINS agreed and said the Community and Regional Affairs Committee also agree with these changes. SENATOR KELLY remarked that this is a unique program and what makes it work is the flexibility away from all of the federal regulations. MR. PERKINS explained there was another change regarding account procedures for accuracy, efficiency, and to ensure compliance with program requirements and generally accepted accounting principles. MR. PERKINS said the administration supported merging these two bills. SENATOR TORGERSON asked if they were increasing the amount of money made available in the step program by going to the 20/80. RON TORGERSON, Department of Labor, replied that the amount the employee pays out is increasing. Number 340 SENATOR TORGERSON moved to combine the two bills. There were no objections and it was so ordered. SENATOR TORGERSON moved to pass CSSB 229 from committee with individual recommendations. There were no objections and it was so ordered. SENATOR KELLY adjourned the meeting at 1:55 p.m.