HOUSE BILL REPORT

                  HB 1588

             As Reported By House Committee on:

                      State Government

Title:  An act relating to the board of accountancy.

Brief Description:  Regulating the board of accountancy.

Sponsor(s):  Representatives Pruitt, Bowman, Anderson, McLean and Paris; by request of State Board of Accountancy.

Brief History:

  Reported by House Committee on:

State Government, March 1, 1991, DPS.

HOUSE COMMITTEE ON

STATE GOVERNMENT

Majority Report: That Substitute House Bill No. 1588 be substituted therefor, and the substitute bill do pass.  Signed by 6 members:  Representatives Anderson, Chair; Pruitt, Vice Chair; R. Fisher; Grant; O'Brien; and Sheldon.

Minority Report: Do not pass.  Signed by 3 members:  Representatives McLean, Ranking Minority Member; Bowman, Assistant Ranking Minority Member; and Chandler.

Staff:  Linda May (786-7135).

Background:  Currently there are five members on the Washington Board of Accountancy.  Four members hold Certified Public Accountant (CPA) certificates and have been in public practice as CPAs in Washington for the previous 10 years.  The fifth member of the board is the public member.  The governor appoints members to the Accountancy Board.  The board then hires its own staff.

The board charges several different examination, registration, and licensing fees.  One set of examination fees charged by the board goes into a dedicated fund known as the Certified Public Accountants' Account.  All other fees collected by the board go into the state general fund.

In addition to holding a certificate, a CPA with a public practice must also hold a license.  There is some ambiguity in existing law regarding the appropriate use of the title "Certified Public Accountant" by those who hold a certificate but do not hold a license.  Also, the board currently has the authority to revoke or suspend the license of a CPA, but this authority does not extend to a certificate.

Summary of Substitute Bill:  Two members are added to the Board of Accountancy, bringing the number of members to seven.  The two new members must have held valid Washington CPA certificates for at least 10 years but do not have to meet the public practice stipulation. 

The governor is to appoint the executive director of the board.  The executive director must be a licensed CPA.  The executive director is given the authority to employ staff.

Eighty percent of the fees received by the board are to be deposited in the Certified Public Accountants' Account.  Twenty percent of fees will be deposited to the state general fund.

The board is given the authority to specify the manner and circumstances for the use of the CPA title by those who hold certificates but not licenses.  The board's authority to revoke, suspend, or refuse to renew licenses is expanded to include certificates.

Substitute Bill Compared to Original Bill:  In the original bill, the board's authority to employ staff is removed but not delegated to anyone else.  In the substitute bill, this authority is assigned to the executive director.  The substitute bill also re-words and moves to a separate section the language describing the new allocation of revenues between the Certified Public Accountants' Account and the general fund.

Fiscal Note:  Available.

Effective Date of Substitute Bill:  Ninety days after adjournment of session in which bill is passed.

Testimony For:  The board's job is to protect the public interest.  The number of CPAs in the state is increasing, and issues are growing more complex.  Increasing the membership on the board leads to better continuity, distribution of the workload, and more public representation.  New allocation of revenues will help the board to better serve the public and let the board be self-sufficient.

Testimony Against:  None.

Witnesses:  Kit Hardan and Duffy Rader, Board of Accountancy (in favor).