HB 44-PRACTICE OF ACCOUNTING; LICENSURE  4:43:07 PM CO-CHAIR SPOHNHOLZ announced that the final order of business would be HOUSE BILL NO. 44, "An Act relating to the practice of accounting." [Before the committee was CSHB 44(STA).] 4:43:54 PM REPRESENTATIVE STEVE THOMPSON, Alaska State Legislature, as prime sponsor of HB 44, thanked the committee. 4:44:36 PM CO-CHAIR FIELDS explained that the proposed legislation would increase oversight of out-of-state accountants who provide services within Alaska. 4:45:19 PM REPRESENTATIVE MCCARTY shared his support for the proposed legislation. 4:45:35 PM CO-CHAIR SPOHNHOLZ expressed understanding that the proposed legislation would eliminate the licensing fee for out-of-state accountants. She asked how the state would have the resources for enforcement. 4:46:42 PM SARA CHAMBERS, Director, Division of Corporations, Business, and Professional Licensing (CBPL), Department of Commerce, Community, and Economic Development, said that CBPL is not anticipating a spike in investigations as a result of the proposed legislation; other states have not seen an increase in investigations; there have been no demonstrable investigations of out-of-state practitioners; and eliminating this particular permit would save the resources normally used in the front-end audit process. 4:47:52 PM CO-CHAIR SPOHNHOLZ shared that there exists currently a $300 application fee and a $900 permit for out-of-state partnerships and limited liability companies. She asked whether those fees would continue to exist under the proposed legislation. MS. CHAMBERS deferred to Ms. Hondolero. 4:48:29 PM CORI HONDOLERO, Executive Administrator, Board of Public Accountancy, Divisions of Corporations, Business, and Professional Licensing, Department of Commerce, Community, and Economic Development, responded that those fees would no longer be incoming. She said that the number of licenses total 98, with an expiration date of December 31, 2021. CO-CHAIR SPOHNHOLZ noted that eliminating the fees for out-of- state licensees would result in a revenue loss of $88,000. MS. HONDOLERO replied that the amount sounds accurate. 4:50:14 PM CO-CHAIR FIELDS asked Ms. Tarver to explain the ways in which the proposed legislation would provide greater oversight of firms based outside Alaska. KAREN TARVER, CPA, Elgee Rehfeld, LLC, pointed out that AS 08.04.421, which is the out-of-state permit and exemption section, would be deleted in its entirety. The way the statute currently reads, she said, an exemption is allowed for out-of- state firms that are not providing audit services. The proposed changes include an exemption for all attestation services, which include audit services as well as financial statement review, review of prospective financial statements, other engagements done in accordance with a public accounting oversight board, and any exemption examinations that follow the standards of attestation engagements as published by AICPA. She explained that the new statute would let firms know that if a licensee is practicing in Alaska and is providing anything in the practice of public accounting as defined by statute, that licensee is accepting Alaska's statutes and regulations. 4:54:04 PM CO-CHAIR SPOHNHOLZ stated that she is concerned about the possibility of reducing revenues to CBPL by $88,000. MS. CHAMBERS explained that the Board of Public Accountancy at CBPL has a surplus of several hundred thousand dollars, which should remain for approximately the next four to six years, at which time firm mobility in Alaska may be reexamined. She pointed out that it's the opinion of CBPL and the board that the lack of license revenue is counteracted by the ability of Alaska practitioners to work in other states. 4:57:54 PM LESLIE SCHMITZ, Chair, Board of Public Accountancy, Division of Corporations, Business, and Public Licensing, Department of Commerce, Community, and Economic Development, agreed with Ms. Chambers' assessment that the loss of fees is worth the expansion of mobility for Alaska-based accountants. She pointed out that the board would have more oversight over the services provided by out-of-state accountants to Alaskan clients. CO-CHAIR SPOHNHOLZ asked whether Ms. Schmitz studied how firm mobility works in smaller states. MS. SCHMITZ deferred to Mr. Neill. 5:00:09 PM THOMAS NEILL, CPA, Chair, Uniform Accountancy Act Committee, American Institute of Certified Public Accountants (AIPCA), said that he checked with AIPCA staff regarding the existence of feedback or complaints on the specific issue of mobility. Hearing none, he said, he approached Jennifer Sciba, Deputy Director of the Washington State Board of Accountancy, who said that there have been very few, if any, complaints about out-of- state firms practicing within states that have adopted firm mobility. He said, "There's no statistical data because, from what I'm hearing, it's just not happening." 5:02:29 PM CO-CHAIR FIELDS moved to report CSHB 44(STA) out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 44(STA) was reported out of the House Labor and Commerce Standing Committee.