Oklahoma 2023 Regular Session

Oklahoma Senate Bill SB170 Compare Versions

Version 1 (Old)

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4		-	An Act
5		-	ENROLLED SENATE
	29	+	HOUSE OF REPRESENTATIVES - FLOOR VERSION
	30	+
	31	+	STATE OF OKLAHOMA
	32	+
	33	+	1st Session of the 59th Legislature (2023)
	34	+
	35	+	ENGROSSED SENATE
6	36		BILL NO. 170 By: Dugger of the Senate
7	37
8	38		and
9	39
10	40		Kendrix of the House
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12	42
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15	45		An Act relating to the Oklahoma Accountancy A ct;
16	46		amending 59 O.S. 2021, Section 15.1A, as last amended
17	47		by Section 1, Chapter 26, O.S.L. 2022 (59 O.S. S upp.
18	48		2022, Section 15.1A), which relates to definitions;
19	49		expanding definition; updating statutory language;
20	50		and providing an effective date .
21	51
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24	54
25		-	SUBJECT: Accountancy definitions
26		-
27	55		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
28		-
29	56		SECTION 1. AMENDATORY 59 O.S. 2021, Section 15.1A, as
30	57		last amended by Section 1, Chapter 26, O.S.L. 2022 (59 O.S. Supp.
31	58		2022, Section 15.1A), is amended to read as follows:
32		-
33	59		Section 15.1A. As used in the Oklahoma Accountancy Act:
34		-
35	60		1. “Accountancy” means the profession or practice of
36	61		accounting;
37		-
38	62		2. “AICPA” means the American Institute of Ce rtified Public
39	63		Accountants;
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41	91		3. “Applicant” means an individual or entity that has made
42	92		application to the Board for a certificate or permit and said the
43	93		application has not been approved;
44		-
45		-
46		-	ENR. S. B. NO. 170 Page 2
47	94		4. “Assurance” means independent professional services that
48	95		improve the quality of inform ation, or its context, for decision
49	96		makers;
50		-
51	97		5. “Attest” means providing the follow ing services:
52		-
53	98		a. any audit or other engagement to be pe rformed in
54	99		accordance with the Statem ents on Auditing Standards
55	100		(SAS),
56		-
57	101		b. any review of a financial statement to be pe rformed in
58	102		accordance with the Stateme nts on Standards for
59	103		Accounting and Review Se rvices (SSARS),
60		-
61	104		c. any engagement examination of prospective financial
62	105		information to be performed in accordance with the
63	106		Statements on Standards for Attes tation Engagements
64	107		(SSAE), and
65		-
66	108		d. any engagement to be performed in accor dance with the
67	109		Auditing Standards of the Public Company Accounting
68	110		Oversight Board (PCAOB), and
69		-
70	111		e. any engagements, review, or agreed upon procedures
71	112		engagement to be performed in ac cordance with the
72	113		SSAE, other than the exceptions described in
73	114		subparagraph c of paragraph 34 of this section.
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75	142		The statements on standards specified in this definition shall
76	143		be adopted by refere nce by the Board pursuant to rulemaking and
77	144		shall be those developed for general application by recognized
78	145		national accountancy organizations, such as the AICPA, IF AC and the
79	146		PCAOB;
80		-
81	147		6. “Audit” can only be performed by an individual or entity who
82	148		is registered with the Board and holding a valid permit issue d
83	149		pursuant to the Oklahoma Accountancy Act, or an individual grante d
84	150		practice privileges under Section 15.12A of this title, and means a
85	151		systematic investigation or ap praisal of information, procedures, o r
86	152		operations performed in accordance with generally accepted auditing
87	153		standards in the United States, for the purpose o f determining
88		-
89		-	ENR. S. B. NO. 170 Page 3
90	154		conformity with established cri teria and communicating the results
91	155		to interested parties;
92		-
93	156		7. “Board” means the Oklahoma Ac countancy Board;
94		-
95	157		8. “Candidate” means an individual who has been qualified a nd
96	158		approved by the Board to take the examination for a certificate;
97		-
98	159		9. “Certificate” means the Oklahoma document issued by the
99	160		Board to a candidate upon successful completi on of the certified
100	161		public accountant examin ation designating the ho lder as a certified
101	162		public accountant pursuant to the laws of Oklahoma. “Certificate”
102	163		Certificate shall also mean the Oklahoma document issued by
103	164		reciprocity to an individual who has previously been certified in
104	165		another jurisdiction;
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106	193		10. “Certified public accountan t” means any person who has
107	194		received a certificate from the Board or other jurisdictions;
108		-
109	195		11. “Client” means the individual or entity which retai ns a
110	196		registrant, an individual granted practice privileges under Section
111	197		15.12A of this title, or a firm exem pt from the permit and
112	198		registration requireme nts under Section 15.15C of this title to
113	199		perform professional services;
114		-
115	200		12. “Compilation” when used with reference to financial
116	201		statements, means presenting information in the form of fin ancial
117	202		statements which is the representation of management or owne rs
118	203		without undertaking to express any assurance on the statements;
119		-
120	204		13. “CPA” or “C.P.A.” means certified public accountant;
121		-
122	205		14. “Designated manager” means the Oklahoma certified public
123	206		accountant or public accountant appointed by the firm partners or
124	207		shareholders to be responsible for the administration of the office;
125		-
126	208		15. “Designee” means the National A ssociation of State Boards
127	209		of Accountancy (NASBA) or other entities so designated by th e Board;
128		-
129	210		16. “Entity” means an organization whether for profit or not,
130	211		recognized by this state to conduct business;
131		-
132		-
133		-	ENR. S. B. NO. 170 Page 4
134	212		17. “Examination” means the test sections of Audit ing and
135	213		Attestation, Business Environment and Concepts, Financial Accounting
136	214		and Reporting, and Regulation or thei r successors, administered,
137	215		supervised, and graded by, or at the direct ion of, the Board or
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138	243		other jurisdiction that is required for a certific ate as a certified
139	244		public accountant;
140		-
141	245		18. “Executive director” means the chief administrative officer
142	246		of the Board;
143		-
144	247		19. “Financial statements” means statements and footnotes
145	248		related thereto that undertake to present an actual or anticipated
146	249		financial position as of a point in time, or results of operations,
147	250		cash flow, or changes i n financial position for a period of time, in
148	251		conformity with generally accepted accounting principles or a nother
149	252		comprehensive basis of accounting. The term does not includ e
150	253		incidental financial data included in management advisory service
151	254		reports to support recommendations to a client; nor does it include
152	255		tax returns and supporting schedules;
153		-
154	256		20. “Firm” means an entity that is either a sole
155	257		proprietorship, partnership, pro fessional limited liability company,
156	258		professional limited liability partnership, l imited liability
157	259		partnership or professional corporation, or any other professional
158	260		form of organization or ganized under the laws of this state or the
159	261		laws of another jurisdiction and issued a permit in accordance with
160	262		Section 15.15A of this title or exempt from the permit requirement
161	263		under Section 15.15C of this title including individual partners or
162	264		shareholders, that is engaged in accountancy;
163		-
164	265		21. “Holding out” means any representation by an individual
165	266		that he or she holds a certificate or license and a valid permit, or
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166	294		by an entity that it holds a valid permit. Any such representation
167	295		is presumed to invite the public to rely upon the professional
168	296		skills implied by the certificate or license and valid permit in
169	297		connection with the services or products offered;
170		-
171	298		22. “Home office” means the location specified by the client as
172	299		the address to which a service des cribed in Section 15.12A of this
173	300		title is directed;
174		-
175	301		23. “IFAC” means the International Federation of Accountants;
176		-
177		-	ENR. S. B. NO. 170 Page 5
178		-
179	302		24. “Individual” means a human being;
180		-
181	303		25. “Jurisdiction” means any state or territory of the United
182	304		States and the District of Columbia;
183		-
184	305		26. “License” means the Oklahoma document issued by the Board
185	306		to a candidate upon successful completion of the public accountant
186	307		examination designating the holder as a public accountant pursuant
187	308		to the laws of this state. “License” License shall also mean the
188	309		Oklahoma document issued by the Board by reciprocity to a pu blic
189	310		accountant who has previously been licensed by examination in
190	311		another jurisdiction;
191		-
192	312		27. “Management advisory services ”, also known as “management
193	313		consulting services”, “management services”, “business advisory
194	314		services” or other similar designation, hereinafter collectively
195	315		referred to as “MAS”, means the function of providing advice and/or
196	316		technical assistance, performed in accordance with standards for MAS
197	317		engagements and MAS consultations suc h as those issued by the
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198	345		American Institute of Certified Public Accountants, where the
199	346		primary purpose is to help the client improve the use of its
200	347		capabilities and resources to achi eve its objectives including but
201	348		not limited to:
202		-
203	349		a. counseling management in analysis, planning,
204	350		organizing, operating, risk manage ment and controlling
205	351		functions,
206		-
207	352		b. conducting special studies, preparing recommendations,
208	353		proposing plans and programs, and p roviding advice and
209	354		technical assistance in their implementation,
210		-
211	355		c. reviewing and suggesting improvement of policies,
212	356		procedures, systems, methods, and organization
213	357		relationships, and
214		-
215	358		d. introducing new ideas, concepts, and methods to
216	359		management.
217		-
218	360		MAS shall not include recommendations and comments prepared as a
219	361		direct result of observations made while performing an audit,
220		-
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222	362		review, or compilation of financial statements o r while providing
223	363		tax services including tax consultations;
224		-
225	364		28. “NASBA” means the National Association of State Boards of
226	365		Accountancy;
227		-
228	366		29. “PA” or “P.A.” means public accountant;
229		-
230	367		30. “Partnership” means a contractual relationship based upon a
231	368		written, oral, or implied agreement between two or more individuals
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232	396		who combine their resources a nd activities in a joint enterprise and
233	397		share in varying degrees and by spec ific agreement in the management
234	398		and in the profits or l osses. A partnership may be general or
235	399		limited as the laws of this state define those terms;
236		-
237	400		31. “PCAOB” means the Public Company Accounting Oversight
238	401		Board;
239		-
240	402		32. “Peer Review” “Peer review” means a review performed
241	403		pursuant to a set of peer review rules established by the Board.
242	404		The term “peer review” peer review also encompasses the term
243	405		“quality review”;
244		-
245	406		33. “Permit” means the written authorit y granted annually by
246	407		the Board to individuals or firms to practi ce public accounting in
247	408		this state, which is issued pursuant to the Oklahoma Accountancy
248	409		Act;
249		-
250	410		34. a. “Practice of public accounting ”, also known as
251	411		“practice public accounting”, “practice” and “practice
252	412		accounting”, refers to the activities of a registran t,
253	413		an individual granted practice privilege s under
254	414		Section 15.12A of this title, or a firm exempt from
255	415		the permit and registration requireme nts under Section
256	416		15.15C of this title in reference to accountancy. An
257	417		individual or firm shall be deemed to be eng aged in
258	418		the practice of public accounting i f the individual or
259	419		firm holds itself out to the public in any manner as
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260	447		one skilled in the knowl edge, science, and practice of
261	448		accounting and audit ing, taxation and management
262	449		advisory services and is qualified t o render such
263		-
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265	450		professional services as a ce rtified public accountant
266	451		or public accountant, and performs the following:
267		-
268	452		(1) maintains an office for the transaction of
269	453		business as a certified public accountant or
270	454		public accountant,
271		-
272	455		(2) offers to prospective clients to perform or who
273	456		does perform on behalf of clients professional
274	457		services that involve or require an audit,
275	458		verification, investigat ion, certification,
276	459		presentation, or review of fi nancial transactions
277	460		and accounting records or an attestation
278	461		concerning any other written assertion,
279		-
280	462		(3) prepares or certifies for clients reports on
281	463		audits or investigations of books or records of
282	464		account, balance sheets, and other financial,
283	465		accounting and related schedules, exhibits,
284	466		statements, or reports which are t o be used for
285	467		publication or for the purpos e of obtaining
286	468		credit, or for filing with a court of law or with
287	469		any governmental agency, or for any other
288	470		purpose,
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290	498		(4) generally or incidentall y to the work described
291	499		herein, renders professional services to clie nts
292	500		in any or all matters relating to accou nting
293	501		procedure and to the recording, presentation, or
294	502		certification of financial information or data,
295		-
296	503		(5) keeps books, or prepares trial balan ces,
297	504		financial statements, or reports, all as a part
298	505		of bookkeeping services for clients,
299		-
300	506		(6) prepares or signs as the tax preparer, tax
301	507		returns for clients, consults with clients on tax
302	508		matters, conducts studi es for clients on tax
303	509		matters and prepares re ports for clients on tax
304	510		matters, unless the services are uncompensated
305	511		and are limited solely to the registrant ’s, or
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307		-	ENR. S. B. NO. 170 Page 8
308	512		the registrant’s spouse’s lineal and collateral
309	513		heirs,
310		-
311	514		(7) prepares personal financial or in vestment plans
312	515		or provides to clients produc ts or services of
313	516		others in implementation of personal financial or
314	517		investment plans, or
315		-
316	518		(8) provides management ad visory services to clients.
317		-
318	519		b. Except for an individual granted practice privileges
319	520		under Section 15.12A of this title or a firm exempt
320	521		from the permit and registration requirements under
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321	549		Section 15.15C of this ti tle, an individual or firm
322	550		not holding a certificate, license or permit shall not
323	551		be deemed to be engaged in the practice of public
324	552		accounting if the individual or firm does not hold
325	553		itself out, solicit, or advertise for clients using
326	554		the certified public accountant or public accountant
327	555		designation and engages only in the following
328	556		services:
329		-
330	557		(1) keeps books, or prepares trial balances,
331	558		financial statements, or reports, provided such
332	559		instruments do not use the terms “audit”,
333	560		“audited”, “exam”, “examined”, “review” or
334	561		“reviewed” or are not exhibited a s having been
335	562		prepared by a certified public accountant or
336	563		public accountant. Except for an indi vidual
337	564		granted practice privileges under Section 15.12A
338	565		of this title or a firm exempt from the permit
339	566		and registration requirements under Section
340	567		15.15C of this title, nonregistrants may use the
341	568		following disclaimer language in connection with
342	569		financial statements and be in compliance with
343	570		the Oklahoma Accountancy Act: “I (we) have not
344	571		audited, examined or reviewed th e accompanying
345	572		financial statements and acc ordingly do not
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346	600		express an opinion or any other form of assurance
347	601		on them.”,
348		-
349		-
350		-	ENR. S. B. NO. 170 Page 9
351	602		(2) prepares or signs as the tax preparer, tax
352	603		returns for clients, consults with clients on tax
353	604		matters, conducts studies for clients o n tax
354	605		matters and prepares reports for clie nts on tax
355	606		matters,
356		-
357	607		(3) prepares personal financial or investment plans
358	608		or provides to clients pr oducts or services of
359	609		others in implementation of personal financial or
360	610		investment plans, or
361		-
362	611		(4) provides management advisory services to clients.
363		-
364	612		c. Only permit holders, individuals granted practice
365	613		privileges under Section 15.12A of this title, or
366	614		firms exempt from the permit and registrati on
367	615		requirements under Section 15.15C of this title may
368	616		render or offer to rende r any attest service, as
369	617		defined herein, or issue a report on financial
370	618		statements which purport to be in compliance with the
371	619		Statements on Standards for Accounting and Review
372	620		Services (SSARS). Thi s restriction shall not prohibit
373	621		any act of a public offic ial or public employee in the
374	622		performance of that person’s duties. This restriction
375	623		shall not be construed to prohibit the performance by
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376	651		any unlicensed individual of other ser vices as set out
377	652		in subparagraph b of this paragraph.
378		-
379	653		d. A person is not deemed to be practicing public
380	654		accounting within the meaning of this section solely
381	655		by displaying an Oklahoma CPA certificate or a PA
382	656		license in an office, identifying himself or herself
383	657		as a CPA or PA on letterhead or business cards, or
384	658		identifying himself or h erself as a CPA or PA.
385	659		However, the designation of CPA or PA on such
386	660		letterheads, business cards, public signs,
387	661		advertisements, publication s directed to clients or
388	662		potential clients, financial or t ax documents of a
389	663		client, performance of any attest servic e or issuance
390	664		of a report constitutes the p ractice of public
391	665		accounting and requires a permit, practice privileges
392	666		under Section 15.12A of t his title, or an exemption
393		-
394		-	ENR. S. B. NO. 170 Page 10
395	667		from the permit and registratio n requirements under
396	668		Section 15.15C of this title;
397		-
398	669		35. “Preissuance review” means a review preformed pursuant to a
399	670		set of procedures that include review of engagement document,
400	671		report, and clients’ financial statements in order to permit the
401	672		reviewer to assess compliance with all applicable professional
402	673		standards;
403	674
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404	701		36. “Principal place of business” means the office location
405	702		designated by the licensee for the purposes of substantial
406	703		equivalency and reciprocity;
407		-
408	704		37. “Professional corporation” means a corporation organized
409	705		pursuant to the laws of this state;
410		-
411	706		38. “Professional” means arising out of or relat ed to the
412	707		specialized knowledge or skills associated with CPAs or PAs;
413		-
414	708		39. “Public accountant” means any individual who has received a
415	709		license from the Board;
416		-
417	710		40. “Public interest” means the collective well -being of the
418	711		community of people and institutio ns the profession serves;
419		-
420	712		41. “Qualification applicant” means an individual who has made
421	713		application to the Board to qualify to become a candidate for
422	714		examination;
423		-
424	715		42. “Registrant” means a CPA, PA, or firm compo sed of certified
425	716		public accountants or publ ic accountants or combination of both
426	717		currently registered with the Board pursuant to the authori ty of the
427	718		Oklahoma Accountancy Act;
428		-
429	719		43. “Report”, when used with reference to any attest or
430	720		compilation service, me ans an opinion, report or other form of
431	721		language that states or implies assurance as to the reliability of
432	722		the attested information or compl ied financial statements, and that
433	723		also includes or is acc ompanied by any statement or implication that
434	724		the person or firm issuing it has special knowledge or competence in
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435	752		accounting or auditing. Such a statement or implication of special
436	753		knowledge or competence may arise from use by the issuer of the
437		-
438		-	ENR. S. B. NO. 170 Page 11
439	754		report of names or titles indicating that the person or firm is an
440	755		accountant or auditor, or from the language of the report itself.
441	756		The term “report” report includes any form of language which
442	757		disclaims an opinion when such form of language is conventionally
443	758		understood to imply any positive assurance as to the reliabili ty of
444	759		the attested information or compiled financi al statements referred
445	760		to and/or special competence on the part of the person or firm
446	761		issuing such language; and it includes any other form of language
447	762		that is conventionally understood to imply such assura nce and/or
448	763		such special knowledge or competence. This definition is not
449	764		intended to include a report prepared by a person not holding a
450	765		certificate or license or not granted practice privileges under
451	766		Section 15.12A of this title. However, such report sha ll not refer
452	767		to “audit”, “audited”, “exam”, “examined”, “review” or “reviewed”,
453	768		nor use the language “in accordance with standards established by
454	769		the American Institute of Certified Public Accountants ” or successor
455	770		of said such entity, or governmental agen cy approved by the Board,
456	771		except for the Internal Reven ue Service. Except for an individual
457	772		granted practice privileges under Section 15.12A of this ti tle or a
458	773		firm exempt from the permit and registration requ irements under
459	774		Section 15.15C of this title, n onregistrants may use the following
460	775		disclaimer language in connection with financial statements not to
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461	803		be in violation of the Oklahoma Accountancy Act: “I (we) have not
462	804		audited, examined, or reviewed the accom panying financial statements
463	805		and accordingly do not express an opinion or any other form of
464	806		assurance on them.”;
465		-
466	807		44. “Representation” means any oral or written communication
467	808		including but not limit ed to the use of title or legends on
468	809		letterheads, business cards, office doors, advertisements, and
469	810		listings conveying the fact that an individual or entity h olds a
470	811		certificate, license or permit;
471		-
472	812		45. “Review”, when used with reference to financial statem ents,
473	813		means a registrant or an individual granted practice privileges
474	814		under Section 15.12A of this title , or a firm exempt from the permit
475	815		and registration requirements under Section 15.15C of this title
476	816		performing inquiry and analytical procedures that pr ovide the
477	817		registrant with a reasonable basis for expressin g limited assurance
478	818		that there are no material modifications that should be made to the
479	819		statements in order for them to be in conformity with generally
480		-
481		-	ENR. S. B. NO. 170 Page 12
482	820		accepted accounting principles or, if applicab le, with another
483	821		comprehensive basis of accounting; and
484		-
485	822		46. “Substantial equivalency ” is a determination by the
486	823		Oklahoma Accountancy Board or its designee that:
487		-
488	824		a. the education, examination and experience requirements
489	825		contained in the statutes and admini strative rules of
490	826		another jurisdiction are comparable to, or exceed, the
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491	854		education, examination and expe rience requirements
492	855		contained in the AICPA/NASBA Un iform Accountancy Act,
493	856		or
494		-
495	857		b. that an individual certified public accountant’s or
496	858		public accountant’s education, examination and
497	859		experience qualifications are c omparable to or exceed
498	860		the education, examinat ion and experience requirements
499	861		contained in the Oklahoma Accountancy Act and rules of
500	862		the Board.
501		-
502	863		In ascertaining substantial equivalency as used in the Oklahoma
503	864		Accountancy Act, the Board or its designee shall take into account
504	865		the qualifications without regard to the sequence in which
505	866		experience, education, or examination requirements were attained.
506		-
507	867		SECTION 2. This act shall become e ffective November 1, 2023.
508	868
509		-
510		-	ENR. S. B. NO. 170 Page 13
511		-	Passed the Senate the 20th day of March, 2023.
512		-
513		-
514		-
515		-	Presiding Officer of the Senate
516		-
517		-
518		-	Passed the House of Representatives the 17th day of April, 2023.
519		-
520		-
521		-
522		-	Presiding Officer of the House
523		-	of Representatives
524		-
525		-	OFFICE OF THE GOVERNOR
526		-	Received by the Office of the Governor this _______ _____________
527		-	day of _________________ __, 20_______, at _______ o'clock _______ M.
528		-	By: _______________________________ __
529		-	Approved by the Governor of the State of Oklahoma this _____ ____
530		-	day of _________________ __, 20_______, at _______ o'clock _______ M.
531		-
532		-	_________________________________
533		-	Governor of the State of Oklahoma
534		-
535		-
536		-	OFFICE OF THE SECRETARY OF STATE
537		-	Received by the Office of the Secretary of State this _______ ___
538		-	day of __________________, 20 _______, at _______ o'clock _______ M.
539		-	By: _______________________________ __
	869	+	COMMITTEE REPORT BY: COMMITTEE ON BUSINESS AND COMMERCE, dated
	870	+	04/05/2023 - DO PASS.