Certified Final Objection No. 141 of the


Joint Legislative Committee on Administrative Rules



            At its meeting on September 20, 2007, the Joint Legislative Committee on Administrative Rules (Committee) voted, pursuant to RSA 541-A:13, IV, to enter a preliminary objection to Final Proposal 2007-92 containing rules Ac 200 (various) and Ac 300-500 of the Board of Accountancy (Board) relative to practice and procedure (8-year provisions), certification, registration and permit requirements, continued status, and ethics.  The objection was based upon the entire written testimony of the New Hampshire Society of Certified Public Accountants (Society), and the portions of the final proposal for which the Board offered a conditional approval request.


            At its meeting on November 15, 2007, the Committee voted, pursuant to RSA 541-A:13, V(d), to enter a revised objection to the preliminary objection response for Final Proposal 2007-92, as requested on behalf of the Board.   The revised objection was based on the Board’s desire to amend incorrect rule citations and statutory citations throughout the objection response, and to address the issue of claims contained in the preliminary objection and further discussed by the Society in its letter to the Committee, dated November 15, 2007.  The Board responded to the revised objection with amended rules dated November 30, 2007.


At its meeting on December 6, 2007, the Committee voted, pursuant to RSA 541-A:13, V(f), to enter a final objection to Final Proposal 2007-92.   The final objection has been filed with the Director of the Office of Legislative Services for publication in the New Hampshire Rulemaking Register.  The effect of a final objection is stated in RSA 541-A:13, VI:


     After a final objection by the committee to a provision of a rule is filed with the director under subparagraph V(f), the burden of proof thereafter shall be on the agency in any action for judicial review or for enforcement of the provision to establish that the part objected to is within the authority delegated to the agency, is consistent with the intent of the legislature, is in the public interest, or does not have a substantial economic impact not recognized in the fiscal impact statement.  If the agency fails to meet its burden of proof, the court shall declare the whole or portion of the rule objected to invalid.  The failure of the committee to object to a rule shall not be an implied legislative authorization of its substantive or procedural lawfulness.


            The following summarizes the basis for the Committee’s final objection:


            Ac 404.04(a)(1) and (3) and (b)(1) and (3)


            The Committee objected that Ac 404.04(a)(1) and (3) and (b)(1) and (3), contained in the revised objection response to Final Proposal 2007-92, are beyond the authority of the Board, pursuant to Committee Rule 401.02, by going beyond the duties of the Board because the specified rules address a Board duty not specifically identified in statute.


Certified Final Objection No. 141 of the


Joint Legislative Committee on Administrative Rules


Page 2


Ac 404.04(a)(1) and (3) relate to the definition of the term “claim” by including within the definition, respectively, “an action filed against the licensee, and which relates to the licensee’s practice of public accounting, in a court of competent jurisdiction,” and “any allegation made to the licensee, in any form, and which results in a payment of $5,000 or more by or on behalf of the licensee to resolve the matter.”  Ac 404.04(b)(1) and (3) require a licensee to report the details of the adjudication or settlement of a claim if it has, respectively, “resulted in an adverse judgment of $5,000 or more against the licensee in a court of competent jurisdiction,” or “been settled by or on behalf of the licensee for $5,000 or more against the licensee.”


The Committee noted that RSA 309-B:4, VIII(i) grants the Board broad rulemaking authority, and RSA 309-B:10, I(i) allows the Board to take enforcement action for “any conduct reflecting adversely upon the licensees fitness to perform services as a licensee.”   However, the Committee determined that these statutes do not provide authority to require the reporting of the information specified in the rules in question.