Federal Legislation Filed to Protect Boards from Antitrust Damages
Congressman Mike Conaway (R-Texas) has introduced the “Occupational Licensing Board Antitrust Damages Relief and Reform Act” (H.R. 6515). The purpose of this important legislation is to address the practical antitrust law implications for state professional and occupational licensing boards affected by the Supreme Court’s 2015 decision in North Carolina State Board of Dental Examiners v. Federal Trade Commission.
We need your help to raise awareness of this bill and to encourage members of Congress to support it as we move forward in this Congress and if necessary the next.
The bill would shield state boards, board members and their staff members from damage awards stemming from private antitrust litigation. It would also allow both government enforcers and private plaintiffs to continue to sue for injunctive relief (and potentially recover attorneys’ fees if successful). However, in order for a particular board to obtain the liability relief, the bill states that certain criteria must be met:
- For a new occupational licensing board, the board must have undergone a sunrise review,
- For existing boards, a periodic sunset review is required unless the occupation is licensed in at least 40 states,
- Boards must also meet two compositional criteria; specifically, that all board members must be selected by an officer of the state and the boards must have public representation.
The legislation also calls for a GAO study that will look at licensing reform, how states can conduct cost-benefit analyses through sunrise and sunset reviews, how states can implement greater portability, including for military veterans and spouses; and how licensing impacts low-income workers and those with criminal records.
This issue hits close to home for Congressman Conaway as he served for seven years as a member of the Texas State Board of Public Accountancy, with five of those years as the Board’s presiding officer. In addition, he served as chair of the National Association of State Boards of Accountancy (NASBA), from 2002-2003. Similarly, as a licensed Texas CPA of more than 40 years, Congressman Conaway understands the significance of having licensed professionals serve on state boards.
The National Association of State Boards of Accountancy (NASBA) and the American Institute of Certified Public Accountants (AICPA) support this legislation, and both believe that a federal solution is necessary to ensure that current and prospective state board members are not deterred from serving, because they are uncertain as to any potential liability that could arise from their public service.
For those members and stakeholders who have a personal or professional relationship with a member of Congress, and are willing to reach out to educate him or her about the issue and the legislation, please contact John Johnson at jjohnson@nasba.org, or by calling 615.880.4232.
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NASBA Submits Statement to US House Subcommittee on Occupational Licensing Reforms
The National Association of State Boards of Accountancy (NASBA), the American Institute of CPAs (AICPA), and a coalition of 16 other associations of state licensing boards and the associations of professionals regulated by those boards provided a written statement to the House Subcommittee on Higher Education and Workforce Development for its hearing on June 20, 2018. The hearing was entitled “Occupational Licensing: Reducing Barriers to Economic Mobility and Growth.” The committee sought to hear from several witnesses regarding how occupational licensing should be reformed.
In that statement, the group wrote: “State governments use occupational licensure to ensure the quality, safety, and integrity of the knowledge-based professions. Licensure and regulation promote high standards practice and effectuates the state’s primary goal of protecting public health, safety, and welfare.”
In a separate letter submitted to the House Subcommittee on Higher Education and Workforce Development, NASBA spoke specifically about the longevity of State Boards of Accountancy, their effective oversight of the accountancy profession and public protection, what Accountancy Boards do to protect the public, and how the accounting profession has successfully eliminated barriers for licensees to be able to offer services across state lines without the need for additional regulatory burdens.
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Active Year for Anti-licensing and Anti-regulation Legislation
The American Legislative Exchange Council (ALEC), Institute for Justice and Americans for Prosperity are several prominent organizations advocate against the use of occupational regulations that serve to protect the public. For example, when enacting future occupational regulations, “The Occupational Licensing Relief and Job Creation Act” requires state legislatures to find real harm and select the least-restrictive regulation to address that harm. The Act also claims to protect entrepreneurs by shifting the burden to the government to show in court and administrative hearings that it is enforcing occupational laws for health-and-safety reasons, not solely as a barrier to entry. In addition to several bills filed in 2017 that carried over into 2018, 15 other states filed anti-regulatory legislation in 2018.
NASBA and the AICPA continue to work closely with State Boards of Accountancy and State CPA Societies in those jurisdictions where legislation is filed by providing counsel, responsive points and testimony submission with the attempt to soften or eliminate harmful and overreaching legislation.
To view the anti-regulatory legislation filed in 2017-18, click on the above “LEGISLATION BY TOPIC” link and then on the “Lawful Occupation” button; you may also click on “LEGISLATION BY JURISDICTION” and then click on the jurisdiction within the map to see a list of legislative bills from the state.
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UAA Related Legislation
The Uniform Accountancy Act is designed to achieve several objectives, chief among them advancing the goal of uniformity. In 2018, legislation has been filed in a number of jurisdictions embracing the following UAA provisions:
- Expanding Mobility to include Firm Mobility
- The revised definition of “Attest”
- CPE Reciprocity - Allows a non-resident licensee seeking renewal of a certificate in New Mexico to meet the CPE requirement by fulfilling those requirements in the licensee’s principal place of business
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Firm Mobility
New Hampshire joins Kentucky and Michigan to have their Firm Mobility legislation signed into law in 2018.
Prior to the inclusion of firm mobility in the Uniform Accountancy Act (UAA) in 2014, 14 states had previously adopted the principle. Today, 25 jurisdictions have full firm mobility. The Massachusetts Firm Mobility legislation filed in 2017 is still active and has been carried over to its 2018 legislative session. To date, two state legislatures have active firm mobility legislation - New Jersey and Massachusetts.
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Attest
New Hampshire Attest Legislation signed into law in 2018 joins 47 other bills that have adopted the updated comprehensive definition of attest, which included seven jurisdictions in 2017.
The Alaska Attest legislation filed in 2017 was carried over to 2018 and has passed out of both chambers, and now awaits Governor Walker’s signature. To date, New Jersey is the only state legislature with active Attest legislation.
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CPE Reciprocity
Connecticut joins Michigan to have their CPE Reciprocity legislation signed into law in 2018.
CPE Reciprocity allows for a nonresident licensee to meet the CPE requirements by meeting the CPE requirements in the state where his/her principal place of business is located. As of today, 27 jurisdictions have CPE Reciprocity.
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Stay Appraised of Legislation Signed into Law
As a majority of jurisdictions have adjourned their 2018 legislative session, NASBA has added under the “RESOURCES” section a quick-link to all legislation signed into law impacting the profession.
For additional information, contact John Johnson at jjohnson@nasba.org or 615.880.4232.
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So, what motivated this change in regulation, who does it affect and what are some of the concerns surrounding NOCLAR? NASBA Board of Directors member and owner of Audit Conduct, Catherine R. Allen, CPA, answered these questions and many others during a NASBAcast segment with Thomas Kenny, Director of Communications. Cathy has a specialized focus on ethics and institutional knowledge and is well-regarded within the accounting profession.
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