Legislation Limiting Damage Awards Against State Regulatory Boards Has Backing of CPA Profession

by AICPA | Jul 30, 2018

WASHINGTON, D.C. (July 30, 2018) – The American Institute of CPAs (AICPA) supports legislation introduced in the United States Congress that would help ensure that members of state regulatory boards are not deterred from serving because of the potential for legal damages related to their public service.

U.S. Representative Mike Conaway (R-Texas) has introduced the Occupational Licensing Board Antitrust Damages Relief and Reform Act (H.R. 6515) to protect state boards – including accountancy boards – board members and staffs from damage awards.

“The accounting profession believes that a federal solution is necessary to ensure that current and prospective state board members are not dissuaded from serving because of uncertainty over any potential liability arising from their public service,” said AICPA President and CEO Barry C. Melancon, CPA, CGMA. “We commend Congressman Conaway for recognizing and addressing this very real threat to voluntary service on state boards of accountancy and other licensing boards.”

“State licensing boards provide an invaluable service to the state,” Rep. Conaway remarked. “Individuals who serve on these boards should enjoy the same legal protections for working on behalf of the state as all other state officials do. Having served on the Texas State Board of Accountancy myself, I understand that serving on a licensing board is performing an important public service. This legislation ensures that members of state licensing boards will continue to serve the state without fear of personal liability.”

In 2015, in North Carolina State Board of Dental Examiners v. Federal Trade Commission, the U.S. Supreme Court ruled that the North Carolina Dental Board was not entitled to “state action” immunity from antitrust laws because its actions were not actively supervised by the state. The AICPA’s goal is to remove the potential for personal financial liability of appointed state board members under antitrust laws – including those who serve on state boards of accountancy.

The AICPA first expressed its concern about the ruling’s impact in a letter that was submitted for the record of the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law’s September 12, 2017 hearing, “Occupational Licensing: Regulation and Competition.” In the letter, Melancon cautioned that state professional boards could lose qualified and experienced members because of the risk of personal liability in lawsuits related to actions taken in the members’ official capacities.

“There is widespread agreement regarding the importance of well-functioning licensing boards, in such learned professions as medical, legal, accounting, engineering, architecture and more, to promote and protect public health, safety and welfare,” Melancon stated. “Therefore, the AICPA believes that a federal solution is important to ensure that current and prospective state board members are not deterred from serving because they are uncertain as to any potential financial liability that could arise from their public service. Such legislation should provide a balanced approach to protecting the public while also allowing for competition in the marketplace for consumers.”

About the American Institute of CPAs

The American Institute of CPAs (AICPA) is the world’s largest member association representing the CPA profession, with more than 431,000 members in 137 countries and territories, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. The AICPA sets ethical standards for its members and U.S. auditing standards for private companies, nonprofit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, builds the pipeline of future talent and drives professional competency development to advance the vitality, relevance and quality of the profession.

The AICPA maintains offices in New York, Washington, DC, Durham, NC, and Ewing, NJ.

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About the Association of International Certified Professional Accountants

The Association of International Certified Professional Accountants (the Association) is the most influential body of professional accountants, combining the strengths of the American Institute of CPAs (AICPA) and The Chartered Institute of Management Accountants (CIMA) to power opportunity, trust and prosperity for people, businesses and economies worldwide. It represents 667,000 members and students across 184 counties and territories in public and management accounting and advocates for the public interest and business sustainability on current and emerging issues. With broad reach, rigor and resources, the Association advances the reputation, employability and quality of CPAs, CGMAs and accounting and finance professionals globally.

Reprinted with permission of the AICPA.

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