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.