HB 44-PRACTICE OF ACCOUNTING; LICENSURE  3:19:54 PM CHAIR KREISS-TOMKINS announced that the next order of business would be HOUSE BILL NO. 44, "An Act relating to the practice of accounting." 3:20:10 PM CHAIR KREISS-TOMKINS moved to adopt the proposed committee substitute (CS) for HB 44, labeled 32-LS0302\B, Fisher, 3/8/21, as the working document. REPRESENTATIVE EASTMAN objected for the purpose of discussion. 3:21:14 PM LYNETTE BERGH, Staff, Representative Steve Thompson, reviewed the changes to HB 44, proposed in the CS, Version B, on behalf of Representative Thompson, prime sponsor. She explained that Version B removes the language "or compilation" on page 8, line 4; removes the language "the board" and inserts "the department" on page 8, line 28; and removes the language "or compilation reports" on page 20, line 5. She said these changes were made at the request of the Alaska Society of Certified Public Accountants. 3:23:18 PM REPRESENTATIVE EASTMAN withdrew his objection. CHAIR KREISS-TOMKINS hearing no further objection to the motion to adopt the proposed committee substitute (CS) for HB 44, labeled 32-LS0302\B, Fisher, 3/8/21, as the working document, announced that Version B was before the committee. 3:23:44 PM REPRESENTATIVE STEVE THOMPSON, Alaska State Legislature, prime sponsor, introduced CSHB 44(STA). He stated that the bill originated after members of the Alaska Board of Public Accountancy contacted his office to share that they had been asked to update Alaska statutes to meet the Uniform Accountancy Act and/or AICPA's Code of Professional Conduct by the National Association of the State Boards of Accountancy (NASBA) and the American Institute of Certified Public Accountants (AICPA). The national organizations provided the Board of Public Accountancy with a summary of areas where Alaska's statutes do not meet the national standards. The board reviewed those statutes over the past several years and developed a rough draft for the bill to address the issues. He conveyed that CSHB 44(STA) incorporates these changes and would update the public accountancy statutes to bring Alaska more in line with national standards while continuing to protect the public interest by ensuring that only qualified persons are licensed, and that appropriate standards of competency and practice are established and enforced. He deferred to Ms. Bergh to provide a sectional analysis of the bill. 3:26:07 PM MS. BERGH noted the length of the sectional analysis [included in the committee packet], which covered 44 sections. She said many of the items in the sectional are redundant as common language was added or removed. She offered to provide a summary of the sectional analysis, which would highlight the changes and be less time intensive. CHAIR KREISS-TOMKINS welcomed the sectional summary. MS. BERGH presented a summarized sectional analysis of the bill [included in the committee packet], which read as follows [original punctuation provided]: The changes in HB44 are intended to better align Alaska accountancy statutes with national standards, using the Uniform Accountancy Act (UAA) as a guiding document. These changes will help ensure a uniform approach to regulation of the accounting profession in Alaska. Throughout the current accountancy statutes, there are antiquated industry terms and definitions. HB 44 updates the following terms: ? "out-of-state exemption" is removed entirely to allow for firm mobility ? "Partnership, limited liability company, corporation, or other legal entity" are replaced with the term "firm"; the updated definition of firm will now include sole proprietors ? "quality review" is replaced with "peer review" ? Sections 37-43 updates/adds new definitions for the following accountancy terms: o "attest function" o "compilation service" o "permit" o "practice of public accounting" o "report" o "state" o "preparation of financial statements" 3:28:27 PM REPRESENTATIVE VANCE referred to language in Section 3, page 2, line 11, which states that the board "may" renew a license granted under Section 3 if the licensee meets the listed criteria. She then directed attention to Section 5, which states that the board "shall" grant a permit on page 2, line 18. Referring back to page 2, line 11, she asked what discretion the board would have to renew a license under Section 3 if the licensee met the statutory criteria. MS. BERGH deferred to Karen Brewer-Tarver or Thomas Neill to speak to the technicalities of the bill. 3:30:07 PM KAREN BREWER-TARVER, Alaska Society of Certified Public Accountants, said the board would renew a license as long as the firm met all of the criteria. She clarified that if all the conditions are met, the board does not have discretion [on whether to renew a license]. 3:31:31 PM REPRESENTATIVE VANCE asked if the word "shall" would be more appropriate since the board does not utilize discretion, to protect against potential litigation. MS. BREWER-TARVER said she would have to think more about that question. She offered her understanding that "shall" could be used but "may" would allow for more discretion. She explained that the Uniform Accountancy Act is a template act, which NASBA and AICPA creates for state boards to look to for best practices. She deferred to Thomas Neill for further information. 3:33:39 PM THOMAS NEILL, Chair, AICPA Uniform Accountancy Act Committee, informed the committee that the UAA [Uniform Accountancy Act] is a template for all 55 licensing jurisdictions to align with to allow for CPAs and CPA firms around the country to act with some uniformity. Regarding the question of "may" versus "shall," he recalled seeing some jurisdictions go both directions. He offered to look more specifically at the entirety of Alaska statutes to consider the cross-references and follow up with a more definitive answer at the next hearing for CSHB 44(STA). He noted that the Uniform Accountancy Act doesn't delve into this level of specificity, further noting it is left to each state jurisdiction to enact mobility as best fits their statutes/rules. 3:35:17 PM REPRESENTATIVE EASTMAN referred to paragraph (3) on page 2, line 16, which states that the board may renew a license issued under Section 4 if the licensee "complies with the requirements of this chapter". He asked to what degree the board is competent to make that determination. 3:36:05 PM MR. NEILL remarked: As I've seen through most state legislative acts relative to how a CPA gets the license, they usually have a cross-reference like this to make sure that they are complying with the entirety of what's drafted in that section of that state's Uniform Accountancy Act. MR. NEILL said with regard to complying, when a CPA applies for a license in Washington there is a set of criteria to consider, which looks at whether the licensee has met the continuing education requirements; whether the licensee has other licenses in or outside the state; whether the licensee has met the peer review requirements. He shared his understanding that the language in question is part of a methodology or criteria to make sure that the licensee is eligible for licensure. 3:37:35 PM REPRESENTATIVE CLAMAN noted that "may" and "shall" are both used throughout Alaska statutes. He suggested that it would be helpful to hear perspective from Legislative Legal Services, in addition to [Mr. Neill's] perspective, on this discussion. He opined that changing the language to "shall" could be problematic if it were inconsistent with the practices and statutes of other professions throughout the state. He posited the courts would conclude that the legislature changed the language for some specific reason. He emphasized the importance of consistency across professions. REPRESENTATIVE THOMPSON offered to follow up with a legal opinion. 3:38:53 PM CHAIR KREISS-TOMKINS announced that HB 44 was held over. 3:39:10 PM CHAIR KREISS-TOMKINS moved that the House State Affairs Standing Committee delegate the duty of drafting and introducing committee sponsored legislation to the committee chair for the duration of the Thirty-Second Alaska State Legislature. REPRESENTATIVE EASTMAN objected. 3:40:01 PM CHAIR KREISS-TOMKINS explained that he had no real interest in introducing legislation that's overly divisive. Additionally, he expressed his desire to consult with every member before introducing a committee sponsored bill to avoid surprises. He further noted that he had no immediate anticipation to introduce any committee sponsored legislation, as it had been used sparingly in past years. 3:40:43 PM REPRESENTATIVE EASTMAN shared his belief that the current expectation that the [committee] majority would make that decision is conducive to discussion and would ensure that the majority of the committee membership supported [the committee- sponsored legislation]. 3:42:22 PM REPRESENTATIVE KAUFMAN expressed his appreciation and respect for Chair Kreiss-Tomkins for proposing this motion. Nonetheless, he said he would find it difficult to vote [for a motion that would] "hand away authority." [REPRESENTATIVE EASTMAN maintained his objection.] 3:42:54 PM A roll call vote was taken. Representatives Tarr, Story, Claman, and Kreiss-Tomkins voted in favor of the motion to delegate the duty of drafting and introducing committee sponsored legislation to the chair of the House State Affairs Standing Committee. Representatives Eastman, Vance, and Kaufman voted against it. Therefore, the motion was passed by a vote of 4-3.