AICPA Backs Legislation Limiting Damage Awards Against State Accountancy Boards

August 23, 2018

The American Institute of CPAs (AICPA) supports legislation introduced in the United States Congress recently 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) 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,” AICPA President and CEO Barry C. Melancon, CPA, CGMA said in a July 30 statement. “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.