Legislature(2017 - 2018)SENATE FINANCE 532

04/18/2018 09:00 AM FINANCE

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SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 147                                                                                     
     "An Act  relating to the  Board of  Public Accountancy;                                                                    
     relating to  the licensure  of public  accountants; and                                                                    
     relating to the practice of public accounting."                                                                            
9:09:33 AM                                                                                                                    
REPRESENTATIVE STEVE  THOMPSON, SPONSOR, stated that  HB 147                                                                    
had  come  about  when  members   of  the  Board  of  Public                                                                    
Accountancy  had  contacted his  office.  He  read from  the                                                                    
Sponsor Statement (copy on file):                                                                                               
     The   National   Association   of   State   Boards   of                                                                    
     Accountancy  (NASBA)  and  the  American  Institute  of                                                                    
     Certified  Public  Accountants   (AICPA)  provided  the                                                                    
     Alaska   Board   of   Public  Accountancy   under   the                                                                    
     Department   of  Commerce,   Community,  and   Economic                                                                    
     Development with  a summary of  areas where  the Alaska                                                                    
     statutes and regulations  for public accountancy differ                                                                    
     from  the Uniform  Accountancy Act  or AICPA's  Code of                                                                    
     Professional Conduct.                                                                                                      
     The  proposed statute  changes  will  align the  Alaska                                                                    
     statutes  and regulations  for public  accountancy with                                                                    
     these national organizations.                                                                                              
9:12:25 AM                                                                                                                    
LYNETTE BERGH, STAFF, REPRESENTATIVE STEVE THOMPSON,                                                                            
discussed the Sectional Analysis (copy on file):                                                                                
     Section 1.  Amends AS  08.04.080    Removes requirement                                                                    
     for  the  board to  mail  full  paper copies  to  every                                                                    
     licensee/interested party  to notice proposed  rules or                                                                    
     Section 2.  Amends AS 08.04.110    Removes  minimum age                                                                    
     Section 3. Amends AS 08.04.195(a)    Removes the number                                                                    
     of  years of  prior  public  accounting experience  and                                                                    
     examination   for   out-of-state  applicants   as   the                                                                    
     applicants    must     meet    accounting    experience                                                                    
     requirements   as   established   by   the   Board   by                                                                    
     Section 4.  Amends AS  08.04.565 -  Adds a  new section                                                                    
     that  delineates prohibited  acts. An  individual under                                                                    
     AS 08.04.105  may not perform attest  functions through                                                                    
     a partnership,  limited liability  company, corporation                                                                    
     or other business entity  unless those groups mentioned                                                                    
     above hold a valid permit under AS 08.04.240.                                                                              
     Section  5. Amends  AS 08.04.622Amends   the exceptions                                                                    
     to  confidential  communication by  adding  information                                                                    
     that  is disclosed  under applicable  state or  federal                                                                    
     laws or  as required  by the Public  Company Accounting                                                                    
     Oversight Board.                                                                                                           
     Section  6. Amends  AS  08.04.680(1)  by expanding  the                                                                    
     definition of  "attest function" to  include procedures                                                                    
     in accordance with the  standards developed by national                                                                    
     accountancy organizations  and adopted by the  board in                                                                    
     Section 7.  AS 08.04.680(19)  is amended  by clarifying                                                                    
     the  definition of  "report". The  definition was  also                                                                    
     amended to conform with the drafting rules.                                                                                
     Section  8.  Amends  AS 08.04.680(20)  definitions  for                                                                    
     "state"  by adding  the  Northern  Mariana Islands  and                                                                    
     clarifying  language  for   the  United  States  Virgin                                                                    
     Section 9. Repeals AS 08.04.120(b), 08.04.180,                                                                             
     08.04.580, 08.04.590, 08.40.595 and 08.04.598.                                                                             
Co-Chair MacKinnon  asked about  Section 9  of the  bill and                                                                    
what was being repealed.                                                                                                        
9:15:43 AM                                                                                                                    
AT EASE                                                                                                                         
9:16:27 AM                                                                                                                    
Ms.  Bergh  confirmed  that  AS  08.04.120(b)  pertained  to                                                                    
education   and   experience  requirements;   AS   08.04.180                                                                    
referenced  applicant  license  requirements;  AS  08.04.580                                                                    
pertained  to partnership  posing as  accountants; 08.04.590                                                                    
dealt  with a  corporation using  a name  without a  current                                                                    
permit; 08.40.595 pertained  to use of a  title with limited                                                                    
liability; and  08.04.598 had  to do with  a title,  name or                                                                    
other legal entity.                                                                                                             
Co-Chair MacKinnon  asked about the rationale  for repealing                                                                    
the sections listed. She understood  that the change related                                                                    
to educational experience.                                                                                                      
Ms. Bergh asked to defer the question to a board member.                                                                        
KAREN  TARVER, STATE  BOARD  OF  PUBLIC ACCOUNTANCY,  JUNEAU                                                                    
(via  teleconference), informed  that she  was in  her fifth                                                                    
year  as  a member  of  the  board.  She detailed  that  the                                                                    
section  pertaining to  prior  applicants  was a  carry-over                                                                    
that  was  outdated  and  no  longer  required  due  to  new                                                                    
Co-Chair MacKinnon  asked if there were  working accountants                                                                    
that the statute applied to.                                                                                                    
Ms.  Tarver stated  that the  section would  be relevant  to                                                                    
applicants that  had applied for  licensure before  1960 and                                                                    
pertained to taking  the exam. The exception  was related to                                                                    
the number of  credits required to take the exam  and was no                                                                    
longer needed to apply to current standards.                                                                                    
Co-Chair MacKinnon  asked if Ms.  Tarver could speak  to the                                                                    
other sections proposed to be repealed.                                                                                         
Ms. Tarver  stated that the remaining  sections proposed for                                                                    
repeal were  all related to the  use of names. With  the new                                                                    
proposed section,  the entities were lumped  together rather                                                                    
than having separate sections.                                                                                                  
9:20:42 AM                                                                                                                    
Senator  Stevens asked  for clarification  on the  repeal of                                                                    
sections relating to educational requirements.                                                                                  
Ms.  Tarver   elucidated  that  the  bill   did  not  repeal                                                                    
educational  requirements.  Rather,  the  bill  proposed  to                                                                    
remove  the particular  exception  for  applicants prior  to                                                                    
1960.   The   current   educational  requirement   was   for                                                                    
applicants to  have 150 semester  hours. The board  had felt                                                                    
that the  group of people  the exception had applied  to had                                                                    
decreased over time.                                                                                                            
Co-Chair  MacKinnon surmised  that 08.04.120(b)  was a  two-                                                                    
part section on educational  requirements, and the 150 hours                                                                    
were  still  required.  Section   (b)  was  proposed  to  be                                                                    
removed, was  related to  the exception  for those  that had                                                                    
applied prior to 1960.                                                                                                          
Ms. Tarver answered in the affirmative.                                                                                         
Co-Chair  MacKinnon  asked  if   AS  08.04.120  remained  in                                                                    
statute and read from existing statute:                                                                                         
     The  education  and   experience  requirements  for  an                                                                    
     applicant are a baccalaureate  degree or its equivalent                                                                    
     conferred by a college  or university acceptable to the                                                                    
     board   and   additional   semester  hours   or   post-                                                                    
     baccalaureate  study  so  that  the  total  educational                                                                    
     program   includes  at   least  150   hours,  with   an                                                                    
     accounting  concentration or  equivalent as  determined                                                                    
     by the board  by regulation to be  appropriate, and two                                                                    
     years  of  accounting  experience satisfactory  to  the                                                                    
9:24:03 AM                                                                                                                    
Senator Stevens  wondered if the sponsor  could elaborate on                                                                    
the  proposed changes  to the  educational requirements.  He                                                                    
asked about the definition  of an acceptable institution and                                                                    
assumed it would be accredited.                                                                                                 
Representative Thompson  stated that  there were  some older                                                                    
regulations  that allowed  for  Certified Public  Accountant                                                                    
(CPA) applicants prior to 1960  to apply without meeting the                                                                    
established  educational  requirements.   He  discussed  the                                                                    
current educational requirements.                                                                                               
Mr. Tarver stated that  Representative Thompson was correct.                                                                    
She offered  to provide  a list of  acceptable institutions,                                                                    
which were based on the guidelines by NASBA and AICPA.                                                                          
Vice-Chair   Bishop  observed   that  there   could  be   an                                                                    
accounting recruiting  problem in  the state.  He referenced                                                                    
Section 2  and Section  3 of  the bill.  He wondered  if the                                                                    
board  was trying  to use  best  practices to  shore up  the                                                                    
shortfall in the profession.                                                                                                    
Representative  Thompson  thought  the  bill  was  repealing                                                                    
older exceptions and had also incorporated new standards.                                                                       
9:27:34 AM                                                                                                                    
CHUCK JOHNSON,  STATE BOARD  OF ACCOUNTANCY,  FAIRBANKS (via                                                                    
teleconference),  addressed   the  comments   by  Vice-Chair                                                                    
Bishop. He  informed that there were  about 54 jurisdictions                                                                    
that administered the CPA test.  He furthered that Section 3                                                                    
of the  bill would allow  for more mobility  between states.                                                                    
He thought the bill was  a cleanup of reciprocity. He opined                                                                    
that older  regulations had been  more restrictive,  and the                                                                    
bill would increase mobility  of out-of-state accountants in                                                                    
Alaska. At  statehood it was  possible to pass the  CPA exam                                                                    
without  going  to college.  He  thought  that removing  the                                                                    
exception would not affect potential license applicants.                                                                        
9:30:09 AM                                                                                                                    
Vice-Chair  Bishop understood  reciprocity  and thanked  Mr.                                                                    
Johnson for his comments.                                                                                                       
Mr. Johnson spoke  to Section 4 and noted  that the statutes                                                                    
had evolved  as corporations  and partnerships  were formed.                                                                    
He discussed the changes and  updates to statutes over time.                                                                    
He referenced the fiscal note  and stated that the board was                                                                    
trying to be  consistent with other boards in  the state. He                                                                    
discussed  the expenses  of mailing  regulation updates  and                                                                    
the utility of the internet.                                                                                                    
Co-Chair MacKinnon asked if Mr.  Johnson was in favor of the                                                                    
Mr. Johnson answered in the  affirmative. He stated that the                                                                    
board was unanimous in support of the bill.                                                                                     
Co-Chair  MacKinnon stated  that  her  staff had  experience                                                                    
with  a  previous  bill  in  2008,  which  had  adopted  new                                                                    
standards  and put  in a  grandfather  clause provision  for                                                                    
those that were completing degrees.                                                                                             
9:33:00 AM                                                                                                                    
Co-Chair MacKinnon OPENED public testimony.                                                                                     
KAREN  TARVER, STATE  BOARD  OF  PUBLIC ACCOUNTANCY,  JUNEAU                                                                    
(via teleconference), testified in  support of the bill. She                                                                    
stated  that  the  board  worked  closely  with  the  Alaska                                                                    
Society of CPAs.                                                                                                                
9:34:13 AM                                                                                                                    
DON   RULIEN,   FORMER   CHAIR,  STATE   BOARD   OF   PUBLIC                                                                    
ACCOUNTANCY,  ANCHORAGE   (via  teleconference),   spoke  in                                                                    
support  of the  bill. He  relayed that  the board  had been                                                                    
working on the  changes for almost two years.  The board had                                                                    
worked closely  with the  Alaska Society  of CPAs  to ensure                                                                    
that all parties were in accord with the proposed changes.                                                                      
9:35:14 AM                                                                                                                    
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
Vice-Chair  Bishop discussed  FN  1 from  the Department  of                                                                    
Commerce,  Community and  Economic Development  (DCCED). The                                                                    
cost in FY 19 would be  $4,000. He read from the Analysis on                                                                    
page 2 of the fiscal note:                                                                                                      
     If the bill passes, the following expenses will be                                                                         
     Services: $4.0 (printing, postage and legal costs for                                                                      
     regulation project)                                                                                                        
     Professional licensing programs  within the Division of                                                                    
     Corporations, Business  and Professional  Licensing are                                                                    
     funded by Receipt Supported  Services, fund source 1156                                                                    
     Rcpt  Svcs (DGF).  Licensing fees  for each  occupation                                                                    
     are set per AS 08.01.065 so the total amount of                                                                            
     revenue    collected     approximately    equals    the                                                                    
     occupation's actual regulatory costs.                                                                                      
Co-Chair  MacKinnon noted  that there  was an  error in  the                                                                    
fiscal note.                                                                                                                    
Representative Thompson  disclosed that  his wife was  a CPA                                                                    
and a past member of the board.                                                                                                 
Co-Chair  MacKinnon asked  for clarification  on the  fiscal                                                                    
note. She wondered if there was an inaccurate title.                                                                            
SARA  CHAMBERS,  DIVISION  OF  CORPORATIONS,  BUSINESS,  AND                                                                    
PROFESSIONAL  LICENSING, DEPARTMENT  OF COMMERCE,  COMMUNITY                                                                    
AND ECONOMIC DEVELOPMENT,  was not aware of an  error in the                                                                    
fiscal note.                                                                                                                    
9:38:17 AM                                                                                                                    
AT EASE                                                                                                                         
9:38:22 AM                                                                                                                    
Co-Chair MacKinnon clarified that there  was not an error on                                                                    
the fiscal note.                                                                                                                
Co-Chair MacKinnon asked  if there had been  feedback on the                                                                    
repeal  of  a  section  that required  a  copy  of  proposed                                                                    
regulations  be mailed  to all  licensees, or  if there  was                                                                    
general  understanding and  acceptance  from  people in  the                                                                    
Ms. Chambers  answered in the  affirmative. She  stated that                                                                    
the bill  would bring the  board's regulations in  line with                                                                    
others in the  division. She stated that  the division would                                                                    
continue to mail a one-page  alert to relevant licensees and                                                                    
interested  parties.  The   proposed  change  would  provide                                                                    
modernization,  had been  vetted  by the  Department of  Law                                                                    
(DOL), and had received no negative feedback.                                                                                   
Co-Chair  MacKinnon  stated  that her  office  had  received                                                                    
regulation review notifications frequently,  and it was hard                                                                    
to follow what transpired. She  was not sure that condensing                                                                    
information to one page would be advantageous.                                                                                  
Ms. Chambers  stated that  the division's  goal was  to make                                                                    
the  public processes  engaged  in  by the  board  to be  as                                                                    
transparent  as possible.  With  the  action described,  the                                                                    
division  would provide  more  information  online that  had                                                                    
explanations  in plain  language. One  of her  goals was  to                                                                    
continue to  make the process  adhere to best  practices and                                                                    
avoid the sentiments that  Co-Chair MacKinnon had described.                                                                    
She relayed  that the division  had recently added  a second                                                                    
regulations specialist  after having only one  on staff. She                                                                    
expressed a desire  to work with Co-Chair  MacKinnon and her                                                                    
staff to glean more feedback.                                                                                                   
Co-Chair     MacKinnon     appreciated     Ms.     Chambers'                                                                    
responsiveness.  She  elaborated  that  confusion  could  be                                                                    
caused   by  providing   incomplete  information   regarding                                                                    
regulation changes.                                                                                                             
9:41:35 AM                                                                                                                    
Senator Stevens asked  for a brief explanation  of the board                                                                    
members' experience and length of term.                                                                                         
Ms. Chambers  believed the board  had 7 members.  All boards                                                                    
were made up  of a mix of licensees and  public members. All                                                                    
boards had a limitation of  two terms served without a break                                                                    
in  service. Board  members  could then  be  appointed at  a                                                                    
later time if there was a break in service.                                                                                     
Co-Chair MacKinnon  asked if Mr.  Johnson could  confirm the                                                                    
Ms. Johnson had been on the  board for 7 years and would end                                                                    
his second  term on the  Board of Accountancy  the following                                                                    
February. He  believed that two  other members  were serving                                                                    
second terms as well.                                                                                                           
Senator Stevens asked about term  limits. He surmised that a                                                                    
board  member could  serve for  two  four-year terms  before                                                                    
having to take a term off.                                                                                                      
Mr.  Johnson   agreed.  There  was  a   public  member  from                                                                    
Kotzebue.  He  stated  that the  board  endeavored  to  have                                                                    
diverse geographical representation within the state.                                                                           
SSHB  147  was  HEARD  and HELD  in  committee  for  further                                                                    
Co-Chair MacKinnon set aside SSHB  147. She asked members to                                                                    
submit proposed amendments or concerns by noon.                                                                                 
9:45:08 AM                                                                                                                    
AT EASE                                                                                                                         
9:48:23 AM                                                                                                                    

Document Name Date/Time Subjects
HB 147 Sectional Analysis ver J .pdf SFIN 4/18/2018 9:00:00 AM
HB 147
HB 147 Summary of Changes ver A to ver J.pdf SFIN 4/18/2018 9:00:00 AM
HB 147
HB 147 Sponsor Statement ver J.pdf SFIN 4/18/2018 9:00:00 AM
HB 147
HB 147 Supporting Documents.pdf SFIN 4/18/2018 9:00:00 AM
HB 147
HB 216 Legal Opinion Regarding Repayments 4.14.2018.pdf SFIN 4/18/2018 9:00:00 AM
HB 216
Hb 216 Legal Opinion Regarding Appropriation Priorities withough a fixed amount 18-057mlp 4.14.2018.pdf SFIN 4/18/2018 9:00:00 AM
HB 216
HB 216 Additional Documents Criminal Fund Use Over the Years with Percentages 4.14.2018.pdf SFIN 4/18/2018 9:00:00 AM
HB 216
HB216 Additional Documents Difference Bertween Restitution and Compensation 4.14.2018.pdf SFIN 4/18/2018 9:00:00 AM
HB 216
HB216 Additional Documents FY14 Felons Memo 4.14.2018.pdf SFIN 4/18/2018 9:00:00 AM
HB 216
HB216 Additional Documents FY15 Felons Memo 4.14.2018.pdf SFIN 4/18/2018 9:00:00 AM
HB 216
HB216 Additional Documents FY16 Felons Memo 4.14.2018.pdf SFIN 4/18/2018 9:00:00 AM
HB 216
HB216 Additional Documents FY17 Felons Memo 4.14.2018.pdf SFIN 4/18/2018 9:00:00 AM
HB 216
HB216 Additional Documents FY18 Felons Memo 4.14.2018.pdf SFIN 4/18/2018 9:00:00 AM
HB 216
HB216 Additional Documents HB245 from 1988 4.14.2018.pdf SFIN 4/18/2018 9:00:00 AM
HB 216
HB 245
HB216 Additional Documents Victim Restitution Reform in Other States Research 4.14.2018.pdf SFIN 4/18/2018 9:00:00 AM
HB 216
HB216 Additional Materials Restitution Statistics from ACS 4.14.2018.pdf SFIN 4/18/2018 9:00:00 AM
HB 216
HB216 Reference Document LRS Report of 2017 4.14.2018.pdf SFIN 4/18/2018 9:00:00 AM
HB 216
HB216 Restitution Sectional 4.14.2018.pdf SFIN 4/18/2018 9:00:00 AM
HB 216
HB216 Sponsor Statement 4.14.2018.pdf SFIN 4/18/2018 9:00:00 AM
HB 216
HB216 Support Documents 4.14.2018.pdf SFIN 4/18/2018 9:00:00 AM
HB 216
HB 216 Additional Documents PowerPoint Presentation 4.18.2018.pdf SFIN 4/18/2018 9:00:00 AM
HB 216