HB 126-EXTEND BOARD OF PUBLIC ACCOUNTANCY  1:31:45 PM CHAIR COSTELLO announced the consideration of HOUSE BILL NO. 126 "An Act extending the termination date of the Board of Public Accountancy; and providing for an effective date." 1:32:01 PM REPRESENTATIVE STEVE THOMPSON, Alaska State Legislature, Juneau, Alaska, introduced HB 126 paraphrasing the following sponsor statement: HB 126 extends the termination date for the Board of Public Accountancy for eight years until June 30, 2029. Legislative Audit conducted their review of this board and concluded that "?the board served the public's interest by conducting meetings in accordance with state laws, amending certain regulations to improve the public accountancy occupation, and effectively licensing and regulating certified public accountants and partnerships/corporations engaged in the practice of public accountancy." The Board of Public Accountancy consists of seven members appointed by the Governor. Five members are certified public accountants or public accountants, and two members are public members. Extending the Board of Public Accountancy is critical in protecting the public interest by ensuring that only qualified persons are licensed, and that appropriate standards of competency and practice are established and enforced. REPRESENTATIVE THOMPSON disclosed that his wife is a CPA and past member of the Board of Public Accountancy. 1:33:36 PM KRIS CURTIS, Legislative Auditor, Division of Legislative Audit, Alaska State Legislature, Juneau, Alaska, stated that the Division of Legislative Audit conducted a sunset audit of the Board of Public Accountancy the purpose of which was to determine whether the board is serving the public's interest and should be extended. She reported that the audit concluded that the board served the public's interest by conducting meetings in accordance with state law, by amending certain regulations to improve the occupation, and by effectively licensing and regulating certified public accountants and those engaged in public accountancy. The division recommends that the legislature extend the board for 8 years, which is the maximum allowed by statute. 1:34:23 PM MS. CURTIS directed attention to the standard licensing statistics on page 5 of the audit [copies in members' packets]. She said the exhibit shows that as of January 2020, there were 1,320 active licenses and permits in the state. This is a 10 percent increase compared to the prior 2012 sunset audit. The auditors found that the reason for the increase was that Alaska is among the few states that does not require a Social Security number for licensure. This resulted in the board receiving many international applications. She directed attention to the list of board revenues and expenditures on page 7. As of the end of FY2019, the board had a surplus of just more than $84,000. The schedule of fees is on page 8. MS. CURTIS said the audit recommends, on page 11, that the Division of Corporations, Business, and Professional Licensing's chief investigator ensure timely completion of investigations. Auditors found that from July 2016 through January 2020, 101 or 40 percent of those cases were open for more than 180 days. A review of five of those cases found that two had periods of unjustified inactivity ranging from 64-219 days. MS. CURTIS directed attention to the response to the audit on page 21. She reported that the commissioner of the Department of Commerce, Community, and Economic Development agreed with the conclusions of the report except for the conclusion that 40 percent of investigations took over six months to complete. The commissioner stated, "The Division of Corporations, Business, and Professional Licensing has no control over how an investigation will unfold or how long it will take, and it does not have a policy that all investigations should be completed within any specific timeframe." She highlighted that the commissioner did authorize an additional investigative supervisor to reduce caseloads. 1:36:32 PM MS. CURTIS stated that the commissioner also took exception to the conclusion that the use of technology had affected the board's operations, arguing that the existing technology tools have been successful for all the boards. MS. CURTIS directed attention to the response from the chair of the board that begins on page 25. The chair did not disagree with the conclusions but did highlight a disagreement that the board is having with the division about what constitutes essential travel. 1:37:07 PM CHAIR COSTELLO asked for the number of licensed CPAs in the state. MS. CURTIS answered that there are 1,118, including herself and many of her staff. CHAIR COSTELLO moved to invited testimony. 1:37:52 PM LESLIE SCHMITZ, Chair, Board of Public Accountancy, Division of Corporations, Business and Professional Licensing, Department of Commerce, Community and Economic Development, Anchorage, Alaska, stated that she was serving her eighth and final year on the board. She thanked the Division of Legislative Audit for recommending the 8-year extension for the board. She stated that the board tries to be interactive with stakeholders, the public, and licensees and attempts to stay active at the national level to address issues that affect the profession. She reported that the board also maintains ongoing projects to update its statutes and regulations to stay current with national trends. On behalf of the board, she thanked the committee for hearing HB 126. 1:39:03 PM CHAIR COSTELLO opened public testimony on HB 126. 1:39:20 PM CRISTA BURSON, President and CEO, Alaska Society of CPAs (Alaska-CPA), Anchorage, Alaska, stated support for HB 126 and extending the termination date for the Board of Public Accountancy for the maximum eight years. She said this board operates in the public's interest and provides appropriate regulatory oversight of Alaska licensed CPAs. The board is inclusive of all interested parties and it has a positive and collaborative relationship with Alaska-CPA. She thanked the committee for its consideration of the bill. 1:40:21 PM CHAIR COSTELLO closed public testimony on HB 126. She asked Sara Chambers to comment on the timeliness of investigations. She offered her understanding that the board is not responsible for the timing of an investigation once it starts. 1:41:03 PM SARA CHAMBERS, Director, Division of Corporations, Business, and Professional Licensing, Department of Commerce, Community and Economic Development, Juneau, Alaska, stated that investigative timeliness is the responsibility of the division investigators. None of the cases Ms. Curtis mentioned related to board action. Rather, they were delays that sometimes occur through the normal investigative process such as life, health, and safety matters, which receive priority above most other investigations for the CPA Board. The concern she and Ms. Curtis discussed is that the division is not adequately documenting the rationale for the delays. That is not a board responsibility but it is a reporting criterion of the audit. CHAIR COSTELLO asked for the number of division investigators the number of boards and commissions in the state. MS. CHAMBERS answered that the division oversees 43 licensing programs and it has 18 professional investigators. She noted that some of the programs have multiple investigators working on them and some programs, like the CPA Board, share one investigator among several boards. CHAIR COSTELLO asked if COVID-19 affected the timeliness of the investigations. MS. CHAMBERS said no; in fact, the efficiencies the division has been working on over the last year have shortened the average closure time for cases by 100 days. 1:45:14 PM CHAIR COSTELLO asked her to provide information on the timeliness of all the investigations the division undertakes. MS. CHAMBERS agreed to run the report and forward it to the committee as soon as possible. 1:45:49 PM SENATOR GRAY-JACKSON moved to report HB 126, work order 32- LS0429\A, from committee with individual recommendations and attached fiscal note(s). CHAIR COSTELLO found no objection and HB 126 was reported from the Senate Labor and Commerce Committee. 1:46:15 PM REPRESENTATIVE THOMPSON thanked the committee for its consideration.