LaValle Amends Legislation to Establish Independent Professional Boards

LaValle Amends Legislation to Establish Independent Professional Boards
State Accountancy Board Would Be Strengthened, Including Rule-Making Authority

By Dennis O’Leary, Legislative Counsel

Continued from the Home Page

The governor, the temporary president of the Senate and the Assembly speaker would each appoint one consumer representative to the boards. Last year’s bill would have stripped the Regents of their current power to appoint professional members of the boards. Instead, the bill would have vested the appointment power for professional members in the governor, the temporary president of the Senate, the Assembly speaker and the minority leaders of the Senate and Assembly.

The prior version gave the appointment authority for the three consumer representatives to the Regents. Under current law, the Regents are required to appoint at least two public representatives to each professional board

The main goal of LaValle’s bill is to have independent state boards replace the current “advisory” boards that are now fully appointed—both professional members and public representatives—by the Regents. This would be a major change for the New York State Board for Public Accountancy that currently serves in an advisory capacity to the Regents and the State Education Department (SED).

Under the amended bill, the accountancy board would have independent rule-making authority by majority vote of its entire membership “on matters of professional licensing, practice and conduct.” This would hold true except when the SED determines that a rule would have “a negative impact on another profession licensed under the education law.” In such instances, the Regents would be empowered, by vote of two-thirds of its entire membership, to override, amend or replace the rule or regulation promulgated by the board. The independent rule-making authority for the professional boards would sunset on Sept. 1, 2008, to allow the legislature to evaluate its effectiveness and change the law, if appropriate.

“This shift in rule-making authority from the Regents to the professional board is huge, and would transform the New York State Board for Public Accountancy from purely ‘advisory’ to a rule-making body,” said the New York State Society of CPAs’ Vice President Vincent J. Love. “This bill would give New York’s accountancy board regulatory powers similar to most other states.”

The bill also contains a specific provision to ensure that the accountancy board has representation from the various practice segments within the accounting profession. The amended legislation creates an “Independent State Board for Public Accounting” to be composed of 20 licensed certified public accountants. Five members would be from firms that employ more than 300 CPAs in New York; five from firms that employ at least 25 but no more than 300 CPAs in the state; five from firms that employ less than 25 CPAs in New York; and “five who shall be either retired or in the employ of a business entity whose primary function does not include accounting services.”

The term of office for a board member, including the three consumer representatives, would be reduced from the current five-year term to a three-year term, with no board member to serve for more than two consecutive terms.

“The current system of ‘advisory’ boards for the licensed professions are not providing the degree of accountability and public protection that can be achieved through the creation of independent professional boards,” according to LaValle’s memorandum in support of S.3405-C.

Recent high-profile and public instances of professional malfeasance within the licensed professions have demonstrated the need for government to closely scrutinize the licensed professions in order to protect the consuming public, LaValle added in his support memorandum.

The bill has not yet been introduced in the Assembly, but would take effect on Sept. 1, 2005, if it is enacted into law.