South Carolina General Assembly
111th Session, 1995-1996

Bill 4627


                    Current Status

Bill Number:                    4627
Ratification Number:            523
Act Number:                     453
Type of Legislation:            General Bill GB
Introducing Body:               House
Introduced Date:                19960215
Primary Sponsor:                Cato
All Sponsors:                   Cato, J. Brown, H. Brown, Boan,
                                Vaughn, Wright, Tripp and Lanford 
Drafted Document Number:        pfm\7963ac.96
Companion Bill Number:          1202
Date Bill Passed both Bodies:   19960530
Date of Last Amendment:         19960529
Governor's Action:              U  Became law without signature of
                                Governor
Date of Governor's Action:      19960620
Subject:                        Public accountants, regulation
                                of

History



Body    Date      Action Description                       Com     Leg Involved
______  ________  _______________________________________  _______ ____________

------  19960709  Act No. A453
------  19960620  Unsigned, became law without
                  signature of Governor
------  19960613  Ratified R523
Senate  19960530  Ordered enrolled for ratification
House   19960529  Receded from its amendments
Senate  19960529  Non-concurrence in House amendment
House   19960528  Senate amendments amended,
                  returned to Senate with amendment
House   19960523  Debate adjourned on Senate
                  amendments until Tuesday,
                  19960528
Senate  19960516  Read third time, returned to House
                  with amendment
Senate  19960515  Amended, read second time, 
                  ordered to third reading 
                  with notice of general amendments
Senate  19960416  Committee report: Favorable with         12 SLCI
                  amendment
Senate  19960402  Introduced, read first time,             12 SLCI
                  referred to Committee
House   19960329  Read third time, sent to Senate
House   19960328  Read second time, unanimous consent
                  for third reading on the next
                  Legislative day
House   19960328  Amended
House   19960327  Committee report: Favorable with         26 HLCI
                  amendment
House   19960215  Introduced, read first time,             26 HLCI
                  referred to Committee

View additional legislative information at the LPITS web site.


(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

(R523, H4627)

AN ACT TO AMEND TITLE 40, CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 2 SO AS TO REENACT THE REGULATION OF CERTIFIED PUBLIC ACCOUNTANTS, PUBLIC ACCOUNTANTS, AND ACCOUNTING PRACTITIONERS PREVIOUSLY PROVIDED FOR IN CHAPTER 1 OF TITLE 40; TO AMEND TITLE 40, CHAPTER 1, AS AMENDED, RELATING TO THE LICENSURE AND REGULATION OF CERTIFIED PUBLIC ACCOUNTANTS, PUBLIC ACCOUNTANTS, AND ACCOUNTING PRACTITIONERS SO AS TO DELETE ALL PROVISIONS AND TO PROVIDE, AMONG OTHER THINGS, FOR THE POWERS AND DUTIES COMMON TO ALL OCCUPATIONAL AND PROFESSIONAL LICENSING BOARDS UNDER THE ADMINISTRATION OF THE DEPARTMENT OF LABOR, LICENSING AND REGULATION; AND TO REPEAL CHAPTER 73, TITLE 40, RELATING TO PROFESSIONS AND OCCUPATIONS ADMINISTERED BY THE DEPARTMENT OF LABOR, LICENSING AND REGULATION.

Be it enacted by the General Assembly of the State of South Carolina:

Licensure and regulation of certified public accountants, public accountants, and accounting practitioners

SECTION 1. Title 40 of the 1976 Code is amended by adding:

"CHAPTER 2

Accountants

Article 1

Regulation of Certified Public Accountants

and Public Accountants

Section 40-2-10. A person is deemed to be practicing public accounting as a certified public accountant within the meaning of this article who displays a sign or in any way holds himself out as a certified public accountant.

Section 40-2-20. A person is deemed to be practicing public accounting as a public accountant within the meaning of this article who displays a sign or in any way holds himself out as a public accountant.

Section 40-2-30. It is unlawful for a person to hold himself out as a certified public accountant or to use the title `certified public accountant' or the designation `CPA' in this State unless the person has obtained a certificate of registration from the South Carolina Board of Accountancy as provided in this article. It is unlawful for a partnership to hold itself out as a partnership of certified public accountants unless it is registered with the South Carolina Board of Accountancy and:

(1) At least one general partner is a certified public accountant of this State in good standing;

(2) Each partner personally engaged within this State in the practice of public accounting as a member of the partnership is a certified public accountant of this State in good standing;

(3) Each partner is a certified public accountant in good standing of some state of the United States;

(4) Each resident manager in charge of an office of the firm in this State is a certified public accountant of this State in good standing. Application for registration must be made upon the affidavit of a general partner of the partnership who is a certified public accountant of this State in good standing. The board shall determine whether the applicant is eligible for registration. A partnership which is registered may use the words `certified public accountants' or the designation `CPA's' in connection with its partnership name. Notification must be given the board, within one month, after the admission to or withdrawal of a partner from a registered partnership.

No person may assume or use the title or designation `certified public accountant' in conjunction with names indicating or implying that there is a partnership or in conjunction with the designation `and Company' or `and Co.' or a similar designation if there is in fact no bona fide partnership; however, a sole proprietor or partnership lawfully using that title or designation in conjunction with names or designation on July 1, 1965, may continue to do so if the person or partnership otherwise complies with this article.

Section 40-2-40. It is unlawful for a person to hold himself out as a public accountant or to use the title `public accountant' or the designation `PA' in this State unless the person has obtained a license as a public accountant from the South Carolina Board of Accountancy as provided in this article. It is unlawful for a partnership to hold itself out as a partnership of public accountants unless it is registered as a partnership by the South Carolina Board of Accountancy and:

(1) At least one general partner is a certified public accountant or a public accountant of this State in good standing;

(2) Each partner personally engaged within this State in the practice of public accounting as a member of the partnership is a certified public accountant or a public accountant of this State in good standing;

(3) Each partner is a certified public accountant or a registered or licensed public accountant in good standing of some state of the United States;

(4) Each resident manager in charge of an office of the firm in this State is a certified public accountant or a public accountant of this State in good standing.

Application for registration must be made upon the affidavit of a general partner of the partnership who is a public accountant of this State in good standing. The board shall determine whether the applicant is eligible for the license. A partnership which is registered may use the words `public accountants' or the designation `PA's' in connection with its partnership name. Notification must be given the board, within one month, after the admission to or withdrawal of a partner from a registered partnership.

Section 40-2-50. (A) No person may sign or affix his name or any trade or assumed name used by him in his profession or business, or a partnership name, with wording indicating that he is a certified public accountant or public accountant, or that the partnership is composed of certified public accountants or public accountants, or with any wording indicating that he has, or the partnership is composed of persons having, expert knowledge in accounting or auditing, to any opinion or certificate attesting in any way to the reliability of a representation in regard to a person or organization embracing financial information or facts respecting compliance with conditions established by law or contract including, but not limited to, statutes, ordinances, regulations, grants, loans, and appropriations, unless he or it holds a certificate of registration or license issued pursuant to this article. This subsection does not prohibit an officer, employee, partner, or principal of an organization from affixing his signature to a statement or report in reference to the financial affairs of the organization with any wording designating the position, title, or office which he holds in the organization, and this subsection does not prohibit an act of a public official or public employee in the performance of his duties.

(B) No person, not registered or licensed under this article, may sign or affix the name of a professional association with wording indicating that it is a professional association performing services as accountants or auditors or composed of accountants or auditors or persons having expert knowledge in accounting or auditing, to an opinion or certificate attesting in any way to the existence or nonexistence of facts in regard to a person or organization including, but not limited to, facts relating to financial position and results of operations and facts relating to compliance with a contract, law, ordinance, or regulation.

(C) No person, partnership, or professional association not registered or licensed under this article may permit his or its name to be associated with statements purporting to show financial position or results of operations in regard to a person or organization in a manner as to imply that he has, or it is composed of, persons having expert knowledge in accounting or auditing, or in a manner as to state or imply that he or it is licensed under Article 3 unless he or it declaims an opinion on the statements and in connection with the statements indicates clearly that the statements were not audited by him or it and that he or it is prohibited by law from expressing an opinion on the statements. This subsection does not require an officer, employee, partner, or principal of an organization affixing his signature to a statement or report in reference to the financial affairs of the organization with wording designating the position, title, or office which he holds in the organization to state a disclaimer, and this subsection does not apply to an act of a public official or public employee in the performance of his duties.

(D) No person or partnership, not registered or licensed under this article, and no professional association, may hold himself or itself out to the public as an `accountant' or `auditor' by use of a title composed of or indicating either or both by words on a sign, card, letterhead, or in an advertisement or directory, without plainly indicating that the person, partnership, or professional association does not hold a registration or license. This subsection does not prohibit an officer, employee, partner, or principal of an organization from describing himself by the position, title, or office he holds in the organization, and this subsection does not prohibit any act of a public official or public employee in the performance of his duties.

(E) No person, partnership, or professional association shall assume or use the title or designation `certified accountant', `chartered accountant', `enrolled accountant', `licensed accountant', `registered accountant', or any other title or designation likely to be confused with `certified public accountant' or `public accountant', or any of the abbreviations `CA', `AP', `EA', `RA', or `LA', or similar abbreviations likely to be confused with `CPA' or `PA'. A person or partnership registered or licensed under this article as a certified public accountant or public accountant or as a firm of certified public accountants or public accountants may hold himself or itself out to the public as an `accountant' or `auditor' or as a firm of accountants or auditors.

Section 40-2-60. Professional associations may be licensed and operate as certified public accountants, public accountants, and accounting practitioners and must be governed by this chapter and any provision applying to partnerships in this chapter requiring certain qualifications or requirements of a partner or partners must apply to a member or members of the professional association. All persons licensed as certified public accountants, public accountants, and accounting practitioners may practice and operate in any form or manner provided by law. For purposes of this chapter, `professional association' means professional association or professional corporation.

Section 40-2-70. There is created the South Carolina Board of Accountancy which shall carry out the purposes and enforce the provisions of this chapter. The members of the board must be appointed by the Governor.

Section 40-2-80. The board consists of nine members: five licensed certified public accountants, two licensed public accountants or licensed accounting practitioners, and two public members who are not engaged in the practice of public accounting, have no financial interest in the profession of public accounting, and have no immediate family member in the profession of public accounting. As used in this section, `immediate family member' is defined in Section 8-13-100(18). Members must be appointed by the Governor for terms of three years and until their successors are appointed and qualify. Vacancies may be filled by the Governor for unexpired terms. The Governor shall remove a member of the board for neglect of duty or other just cause.

Section 40-2-100. A majority of the membership of the board constitutes a quorum and action must be by majority vote. The board may provide for proxy voting by absent members.

Section 40-2-110. The members of the board shall qualify by taking the oath of office before a notary public or other officer empowered to administer oaths and a record of this must be filed in the office of the Secretary of State. At the first meeting of the board after each annual appointment the board shall elect a chairman, a vice-chairman, and a secretary-treasurer. The secretary-treasurer shall obtain a bond as the board directs.

Section 40-2-120. Members may receive per diem and expenses for each day actually engaged in the duties of the office and mileage at the rate provided by law for state employees for all distances necessarily traveled in going to and from the meetings of the board. These expenses must be paid from fees and licenses received by the board under this article and no part of the salary or other expenses of the board may be paid out of the State Treasury.

Section 40-2-130. Regular meetings for purpose of examinations must be held at least once a year at such place and time as the chairman of the board considers most convenient for applicants. Due notice of meetings for examinations must be given by publication in papers selected by the chairman. The chairman may call from time to time other meetings necessary to the business of the board and shall call a meeting at any time upon the written request of three members of the board.

Section 40-2-140. The board may prescribe rules, regulations, and bylaws, in harmony with this chapter, for its own proceedings and government and for the examination of applicants for the practice of accounting. The board may promulgate and amend regulations of professional conduct appropriate to establish and maintain a high standard of integrity and dignity in the profession of public accountancy. Within sixty days after the promulgation of a regulation or amendment, the board shall mail copies of the regulation or amendment to each holder of a license issued under this article, with a notice advising him of the effective date of the regulation or amendment. Failure to mail the regulation, amendment, or notice to all license holders does not affect the validity of the regulation or amendment. The board, or any member of the board, may issue subpoenas to compel the attendance of witnesses and the production of documents and may administer oaths, take testimony, hear proofs, and receive exhibits in evidence for all purposes required in the discharge of its duties. In case of disobedience to a subpoena the board may invoke the aid of an administrative law judge as provided under Article 5 of Chapter 23 of Title 1 in requiring the attendance and testimony of witnesses and the production of documentary evidence and shall adopt a seal to be affixed to all its official documents.

Section 40-2-150. The board shall collect fees which must be deposited in the general fund of the State, in an amount to at least equal the amount appropriated annually in the general appropriations act for the Board of Accountancy.

Section 40-2-160. The board shall make an annual report as provided by law as soon as practicable after the close of its fiscal year which shall end on June thirtieth.

Section 40-2-170. A person, before beginning to practice as a certified public accountant in this State, shall pass an examination before the Board of Accountancy in accounting and auditing and related subjects as the board determines to be appropriate.

Section 40-2-180. (A) An applicant making application for examination shall submit evidence satisfactory to the board that the applicant:

(1) is at least eighteen years of age;

(2) does not have a history of dishonest or felonious acts;

(3) has the following educational background:

(a) Before July 1, 1997, each applicant must have a baccalaureate degree from a college or university recognized by the board including a minimum of twenty-four hours or the equivalent in accounting hours.

(b) After June 30, 1997, each applicant must have at least one hundred fifty semester hours of college education including a baccalaureate or higher degree conferred by a college or university acceptable to the board, the total educational program to include an accounting concentration or equivalent as determined by board rule to be appropriate.

(B) The educational requirements are waived for a candidate who is a South Carolina public accountant licensed and in good standing under this article or who, on July 1, 1965, was practicing as a public accountant or who then was employed as a staff accountant in this State by anyone practicing public accounting.

Section 40-2-190. The examination provided for in Section 40-2-170 must be held by the board at least once each year.

The board shall advertise the dates of the examinations at least eight weeks before the date set in a newspaper so as to provide adequate statewide notice. Beginning in 1986, the dates set in a newspaper must be at least by September first for the November examination and by March first for the May examination.

The board may make use of all or any part of the uniform certified public accountants' examination or advisory grading service as it considers appropriate to assist it in performing its duties.

A candidate for the certificate of certified public accountant who has successfully completed the examination required under Section 40-2-170 has no status as a certified public accountant unless and until he has the requisite experience and has received his certificate as a certified public accountant. The experience required is either:

(1) two years of accounting experience in public, governmental, or private employment under the direct supervision and review of a certified public accountant licensed to practice accounting in some state or territory of the United States or the District of Columbia;

(2) five years' experience teaching accounting in a college or university recognized by the board; or

(3) a combination of experience determined by the board to be substantially equivalent to items (1) and (2). The experience must include experience satisfactory to the board, in applying generally accepted auditing standards to financial statements prepared in accordance with generally accepted accounting principles.

The board by regulation may provide for granting a credit to a candidate for satisfactory completion of a written examination in one or more of the subjects provided in Section 40-2-170 given by the licensing authority in another state if at the time he took the examination he was not a resident of this State. The regulation must include requirements the board determines appropriate in order that an examination approved as a basis for credit is, in the judgment of the board, at least as thorough as that included in the most recent examination given by the board at the time of the granting of credit.

The board by regulation may prescribe the terms and conditions under which a candidate who passes the examination in one or more of the subjects provided by Section 40-2-170 may be reexamined in only the remaining subjects, with credit for the subjects previously passed. It also may provide by regulation for a reasonable waiting period for a candidate's reexamination in a subject he has failed.

The board shall charge each candidate a fee, to be determined by the board, not in excess of two hundred dollars for the initial examination provided for in Section 40-2-170.

Fees for reexamination provided by this section are charged by the board in amounts determined by it, but not in excess of eighty dollars for each subject in which the candidate is reexamined.

An application for examination or reexamination as prescribed by the board must be submitted and the applicable fee paid at least five weeks before the date of the examination. The application must be submitted and the applicable fee paid by September fifteenth for the November examination and by March fifteenth for the May examination.

Section 40-2-200. Certificates of registration as a certified public accountant issued by the board must be signed by the chairman and secretary-treasurer, and the board shall collect from the recipient a fee to be fixed by the board.

A person who holds a certificate of registration as a certified public accountant under this article, which is in full force and effect, may be styled and known as a `certified public accountant' and also may use the designation `CPA'. A certified public accountant also may be known as a `public accountant'. The board shall maintain a list of certified public accountants.

A person who holds a license as a public accountant under this article, which is in full force and effect, may be styled and known as a `public accountant' and also may use the designation `PA'. The board shall maintain a list of public accountants.

Section 40-2-210. The board shall keep a register in which must be recorded the names of all persons examined and whether or not the applicants successfully passed the examination or any part of the examination.

Section 40-2-220. Before a certificate is issued it must be numbered and recorded in a book kept by the secretary-treasurer of the board. In all legal proceedings this record of certificates or a certified copy of the record is evidence of the facts stated in the record.

Section 40-2-230. Persons who, on July 1, 1965, held certified public accountant certificates issued under the laws of this State are not required to obtain additional certificates under this article, but are subject to all other provisions of this article, and these certificates, for all purposes, must be considered certificates issued under this article and subject to this article.

Section 40-2-240. (A) The board, upon application in writing, may waive the examination referred to in Section 40-2-170 and issue a certificate to a person who is the holder of a certificate, or the equivalent, as a certified public accountant issued under the laws of any state or territory of the United States or the District of Columbia and:

(1) who has the qualifications required by this article and the regulations of the board; or

(2) when, in the judgment of the board, the requirements for issuing or granting certificates in the other state, territory, or the District of Columbia are substantially equivalent to the requirements established by this article and the regulations of the board, and the other state or political subdivision of the United States grants the same privileges to holders of certificates issued by this State.

(B) The board, upon application in writing, may waive the examination referred to in Section 40-2-170 and issue a certificate to a holder of a foreign designation, granted in a foreign country entitling the holder to engage in the practice of public accountancy if:

(1) the foreign authority which granted the designation makes similar provisions to allow a person who holds a valid certificate issued by this State to obtain the foreign authority's comparable designation;

(2) the foreign designation:

(a) was issued by a foreign authority that regulates the practice of public accountancy and the foreign designation has not expired or been revoked or suspended;

(b) entitles the holder to issue reports upon financial statements; and

(c) was issued upon the basis of educational, examination, and experience requirements by the foreign authority or by law; and

(3) the applicant:

(a) received the designation based on educational and examination standards substantially equivalent to those in effect in this State at the time the foreign designation was granted;

(b) completed an experience requirement substantially equivalent to the requirement set out in Section 40-2-190 and regulations of the board; and

(c) passed a uniform qualifying examination in national standards acceptable to the board.

Section 40-2-250. A person who holds a valid and unrevoked certificate as a certified public accountant issued under the authority of a state of the United States or who lawfully practices as a registered and licensed public accountant in a state of the United States, and who resides without the State of South Carolina, may hold himself out within South Carolina as a certified public accountant or as a public accountant if he registers with the board and complies with its regulations regarding registration. A fee to be fixed by the board must be charged for the registration or reregistration. A partnership, each partner of which is a certified public accountant in good standing of some state of the United States or a registered or licensed public accountant lawfully practicing in some state of the United States, may be considered one person for the purposes of this section.

Section 40-2-270. A registered certified public accountant, public accountant, or accounting practitioner who desires to continue to practice in this State must meet the following requirements on or before the dates indicated:

(1) pay to the secretary of the board annually on or before July first a license fee, to be fixed by the board; and

(2) annually, on or before the last day of February of each year, file with the board, on a form or forms prescribed by the board for this purpose, a certificate of compliance with the continuing education requirements necessary for license renewals as required by Section 40-2-380.

The board, by regulation, may provide a penalty not to exceed five hundred dollars for each violation for failure to comply with item (1) or (2) above.

Upon payment of the fee, any penalty required, and filing of the certificate in proper form, the secretary of the board shall issue a license entitling the applicant to practice in this State until July first of the following year.

The board may, in its discretion, reduce or waive the above requirements in cases of illness, mental or physical incapacity, retirement from practice, and similar situations.

Section 40-2-280. In case of default in payment by a person, the person's certificate of registration as a certified public accountant or license as a public accountant must be revoked by the board upon twenty days' notice in writing by the secretary-treasurer of the time and place of considering the revocation. The deposit of the notice in the United States post office addressed to the person at his last known place of residence or business and registered postage prepaid is presumed to be due and legal service of the notice. No certificate of registration as a certified public accountant or license as a public accountant may be revoked for nonpayment if the person notified pays a penalty as imposed by the board, not exceeding seventy-five dollars. A person whose certificate of registration as a certified public accountant or license as a public accountant has been revoked for failure to pay his renewal fee may apply to have it regranted to him upon payment to the board of penalties established and all renewal fees that should have been paid had the certificate of registration as a certified public accountant or license as a public accountant not been revoked.

Section 40-2-290. (A) After notice and hearing pursuant to Section 40-2-310, the board may revoke a certificate as a certified public accountant or license as a public accountant issued under this article; suspend a certificate or license for a period of not more than five years; reprimand, censure, or limit the scope of practice of a certificate holder or licensee; impose an administrative fine not exceeding one thousand dollars; or place a certificate holder or licensee on probation, all with or without terms, conditions, and limitations, for:

(1) fraud or deceit in obtaining a certificate or license;

(2) cancellation, revocation, suspension, or refusal to renew authority to engage in the practice of public accountancy in another state, territory of the United States, or the District of Columbia, for any cause;

(3) revocation or suspension of the right to practice before a state or federal agency;

(4) dishonesty, fraud, or gross negligence in the practice of public accountancy or in the filing or failure to file the certificate holder's or licensee's own income tax returns;

(5) violation of a provision of this article or a regulation promulgated by the board under the authority granted by this article;

(6) violation of a rule of professional conduct promulgated by the board under the authority granted by this article;

(7) conviction of a felony, or a crime, an element of which is dishonesty or fraud, under the laws of the United States, of this State, or any other state if the acts involved would have constituted a crime under the laws of this State. The record of conviction, or a copy of the record, certified by the clerk of court or the judge in whose court the conviction is had, is conclusive evidence of the conviction. The word `conviction' includes a plea of guilty or a plea of nolo contendere;

(8) performance of a fraudulent act while holding a certificate or license under this article; or

(9) conduct reflecting adversely upon the certificate holder's or licensee's fitness to engage in the practice of public accountancy.

(B) In lieu of or in addition to a remedy specifically provided in subsection (A), the board may require one or both of the following requirements of a certificate holder or licensee:

(1) a quality review conducted in a fashion as the board may require; or

(2) satisfactory completion of continuing professional education programs as the board may specify.

A `quality review' means a study, appraisal, or review of one or more aspects of the professional work of a person or firm in the practice of public accountancy by a person or persons who hold certificates or licenses and who are not affiliated with the person or firm being reviewed.

(C) In a proceeding in which a remedy imposed by subsections (A) and (B) of this section is imposed, the board also may require the respondent certificate holder or licensee to pay the costs of the proceeding.

Section 40-2-300. After notice and hearing, as provided in Section 40-2-310, the board shall revoke the registration or license of a partnership if at any time it does not meet the requirements prescribed by Section 40-2-30 or 40-2-40 and may revoke or suspend the registration or license of a partnership for any of the causes enumerated in Section 40-2-290 or for:

(1) the revocation or suspension of the certificate of registration or the revocation or suspension or refusal to renew the license to practice of a partner; or

(2) the cancellation, revocation, suspension, or refusal to renew the authority of the partnership or a partner to practice public accounting in another state for a cause other than failure to pay an annual registration fee in another state.

Section 40-2-310. (A) The board may initiate proceedings under this article either on its own motion or on the complaint of a person.

(B) A written notice, stating the nature of the charge against the accused and the time and place of the hearing before the board on the charge, must be served on the accused not less than thirty days before the date of the hearing, either personally or by mailing a copy by registered mail to the address of the accused last known to the board.

(C) If, after having been served with the notice of hearing as provided for in subsection (D), the accused fails to appear at the hearing and defend, the board may proceed to hear evidence against the accused and may enter an order as is justified by the evidence, which order must be final unless the accused petitions for a review as provided for in subsection (I); however, within thirty days from the date of an order, upon showing of good cause for failing to appear and defend, the board may reopen the proceedings and may permit the accused to submit evidence in his behalf.

(D) At a hearing the accused may appear in person and by counsel produce evidence and witnesses on his own behalf, cross-examine witnesses, and examine evidence as may be produced against him. The accused must be entitled, on application to the board, to the issuance of subpoenas to compel the attendance of witnesses on his behalf.

(E) The board is not bound by technical rules of evidence.

(F) A record of the hearings must be kept and filed with the board.

(G) At all hearings the Attorney General of this State, or one of his assistants designated by him, or other legal counsel as may be employed, shall appear and represent the board.

(H) The decision of the board must be by majority vote, except a decision to revoke the permit must be by unanimous vote of those voting.

(I) A person adversely affected by an order of the board may obtain a review by filing a written petition for review with an administrative law judge, as provided under Article 5 of Chapter 23 of Title 1, within thirty days after the entry of the order. The petition shall state the grounds upon which the review is asked. A copy of the petition must be served upon a member of the board, and the board shall certify and file with the administrative law judge as provided under Article 5 of Chapter 23 of Title 1, a copy of the record upon which the order complained of was entered. The administrative law judge, as provided under Article 5 of Chapter 23 of Title 1, may, in its discretion, stay the effect of the board's order pending its determination of the case.

Section 40-2-320. Upon application in writing and after hearing pursuant to notice, the board may issue a new certificate to a certified public accountant whose certificate has been revoked or may permit the reregistration of anyone whose registration has been revoked or may reissue or modify the suspension of a license to practice public accounting which has been revoked or suspended.

Section 40-2-330. An office established or maintained in this State for the practice of public accounting by a certified public accountant or partnership or professional association of certified public accountants or public accountant or partnership or professional association of public accountants must be registered under this article with the board, but no fee may be charged for registration. An office must be under the direct supervision of a resident manager who may be either a partner or a staff employee holding a license under this article which is in full force and effect. The board must be advised of change of management of an office in each location.

Section 40-2-340. A person who violates a provision of this article is guilty of a misdemeanor and, upon conviction, must be fined not less than fifty dollars or more than two hundred dollars or imprisoned not less than twenty days or more than sixty days. Each violation constitutes a separate offense and each day's violation constitutes a separate offense.

Section 40-2-350. In addition to another remedy or criminal prosecution, if it appears to the board that a person violated a provision of this article or a regulation or order of the board or a law of this State relating to accountancy, the board may file a suit in equity in its own name, or in the name of the State, on its own relation, and by its counsel, with an administrative law judge, as provided under Article 5 of Chapter 23 of Title 1, alleging the facts and praying for a temporary restraining order or permanent injunction against the person, restraining the person from violating the law, regulation, or order, or commanding the person to obey the law, regulation, or order.

Upon proper application, and showing that the person is not registered or that a renewal certificate has not been applied for or that registration has been denied, revoked or suspended, or that the law or regulation or order has been or is about to be violated or disobeyed, which showing may be made by affidavit, the administrative law judge, as provided under Article 5 of Chapter 23 of Title 1, shall issue a temporary restraining order or injunction and, upon final hearing, shall grant and issue an injunction, including mandatory injunction, upon finding the truth and sufficiency of the allegations of the petition. An administrative law judge, as provided under Article 5 of Chapter 23 of Title 1, may enforce the injunction by punishment for contempt and by other process as is permitted to circuit courts and shall make other orders as its discretion and the rules require. The injunction may be limited in time, perpetual or conditional, as may be necessary and proper to the enforcement of this article or the regulations or orders of the board or the law of this State relating to accountancy.

Section 40-2-360. All statements, records, schedules, working papers, and memoranda made by a certified public accountant or public accountant incident to or in the course of professional service to clients, except reports submitted to a client, are the property of the accountant, in the absence of an express agreement between the accountant and the client to the contrary.

Section 40-2-370. If a statute or regulation of a state agency requires that reports, financial statements, audits, and other documents for a department, division, board, commission, or agency of this State be prepared by a certified public accountant, the requirement must be construed to mean licensed public accountants or certified public accountants.

Section 40-2-380. The board shall promulgate regulations implementing the requirements and reporting for continuing education which must be met by certified public accountants, public accountants, and accounting practitioners. The board shall require no less than sixty hours of continuing educational activities in a two-year period. The board shall require compliance with the regulations as a prerequisite to the issuance of a current license to practice as a certified public accountant, public accountant, or accounting practitioner. The requirements may be waived by the board in individual cases for good cause.

In promulgating these regulations, the board shall recognize the following as meeting the continuing educational requirements:

(1) professional development programs of national and state accounting organizations. Only class hours, or the equivalent, and not students' hours devoted to preparation are counted;

(2) technical sessions at meetings of national and state accounting organizations and their chapters;

(3) courses offered by colleges, universities, technical education centers, and other appropriate educational institutions, including credit and noncredit courses. Each semester-hour credit equals fifteen hours toward the requirement; each quarter-hour credit equals ten hours. In noncredit courses, each classroom hour equals one qualifying hour.

(4) other activities, methods, procedures, devices, and programs which, in the opinion of the board, contribute directly to the professional competence of the licensee.

Article 3

Regulation of Accounting Practitioners

Section 40-2-510. A person, firm, or professional association not exempt under Section 40-2-530 is considered to be engaged in the practice of offering to render and rendering to the public the services which are regulated by this article if the person, firm, or professional association:

(1) offers to prospective clients in South Carolina to perform for compensation one or more of these services:

(a) the development, recording, analysis, or presentation of financial information including, but not limited to, the preparation of financial statements; or

(b) advice or assistance in regard to accounting controls, systems, and procedures; and

(2) in any manner holds himself or itself out to the public in South Carolina as skilled in one or more of the types of services described in item (1).

Section 40-2-520. (A) No professional association, person, or partnership, other than a person or partnership holding a permit to practice issued pursuant to this article, may engage in the practice defined in Section 40-2-510 unless he or it plainly indicates on all signs, cards, letterheads, advertisements, and directories used to disclose his or its practice or business that he or it does not hold a license to practice under this article.

(B) No professional association, person, or partnership, other than a person or partnership holding a permit to practice issued pursuant to this article, may assume or use the title or designation `Accounting Practitioner' or any other title, designation, words, letters, abbreviation, sign, card, or device tending to indicate that the person is an accounting practitioner or that the partnership is composed of accounting practitioners or that the person, partnership, or professional association is authorized under this article to engage in the practice defined under Section 40-2-510.

Section 40-2-530. Nothing contained in this article:

(1) applies to a certified public accountant or public accountant who holds a license to practice issued under the law of South Carolina and no provision of this article applies to a partnership of certified public accountants or public accountants which holds a permit to practice issued under South Carolina authority;

(2) applies to a person, firm, or professional association which plainly indicates on all signs, cards, letterheads, advertisements, and directories used to disclose his or its practice or business that he or it does not hold a license to practice under this article;

(3) prohibits a person from serving as an employee of a person, partnership, or professional association if the employee does not engage in the practice defined in Section 40-2-510 on his own account;

(4) prohibits a person, partnership, or professional association from offering to prepare or from preparing a tax return with respect to taxes imposed by a governmental authority, whether federal, state, or local, and this article does not prevent a person from advising clients in connection with tax matters;

(5) prohibits a person, partnership, or professional association holding a license or permit issued by another state, territory, or the District of Columbia, which authorizes the person, partnership, or professional association to engage in the other jurisdiction in the type of practice described in Section 40-2-510, from temporarily practicing in this State as an incident to his or its regular practice outside of this State if the temporary practice is conducted in conformity with the rules of ethical conduct promulgated by the board;

(6) applies to the affixing of the signature or name of an officer, employee, partner, or principal of an organization to a statement or report in reference to the financial affairs of the organization with wording designating the position, title, or office which he holds in the organization, and the provisions of this article do not apply to an act of a public official or public employee in the performance of his duties;

(7) applies to the offering or rendering of data processing services by mechanical or electronic means or to the offering or rendering of services in connection with the operation, sale, lease, rental, or installation of mechanical or electronic bookkeeping or data processing equipment or to the sale, lease, rental, or installation of this equipment.

Section 40-2-540. The South Carolina Board of Accountancy shall examine, license, and discipline accounting practitioners. The board may charge a reasonable fee for examinations, not exceeding the fee charged for certified public accountants' examinations.

Section 40-2-550. In order to be eligible for licensing under this article as an accounting practitioner, an applicant may not hold another license granted under this chapter and must:

(1) not have any history of dishonest or felonious acts;

(2) be a resident of this State or have a place of business in this State, or, as an employee, be regularly employed in this State;

(3) be at least eighteen years of age; and

(4) meet one or more of these requirements:

(a) pass a written examination approved by the board, which is designed to test the applicant's basic knowledge of the subjects described in Section 40-2-510(1) and which may consist of two parts of the examination administered to certified public accountant applicants or another examination as the board may prescribe.

(b) have a bachelor's degree with a major in accounting as determined by the board from a four-year college or university accredited by the Southern Association of Colleges and Schools or from a college or university having equivalent standards as determined by the board.

(c) be licensed and hold a current annual permit to practice in this State as a certified public accountant or public accountant if the person surrenders his license and permit to practice as a certified public accountant or public accountant upon being licensed as an accounting practitioner.

Section 40-2-560. (A) Licenses must be issued by the board to persons satisfying the requirements of Section 40-2-550 upon the payment of a license fee in an amount to be determined by the board.

(B) Permits to engage in the practice defined in Section 40-2-510 must be issued by the board for annual periods expiring on the last day of June to persons and partnerships as follows:

(1) A person holding a license issued pursuant to Section 40-2-510(1)(a), upon payment of a permit fee in an amount to be determined by the board. The board may reduce or waive the fee in case of illness, mental or physical incapacity, retirement from practice, or for similar situations. Failure of a licensee to pay the fee for a permit to practice within three years from the expiration date of the permit to practice last obtained or used or within three years from the date upon which the licensee was granted the license if no permit was ever issued to the person, deprives the person of the right to the permit unless the board determines the failure to have been caused by excusable neglect. The decision of the board is final. A renewal fee for the issuance of the original license must be in an amount the board determines.

(2) Partnerships, without payment of a permit fee, which meet the following standards:

(a) At least one general partner must be an accounting practitioner of this State in good standing;

(b) Each partner personally engaged within this State in the practice defined in Section 40-2-510 must be an accounting practitioner of this State in good standing;

(c) Each partner must be lawfully engaged in the practice, as defined in Section 40-2-510, in some state of the United States;

(d) Each resident manager in charge of an office must be an accounting practitioner of this State in good standing.

(3) File with the secretary of the board on a form prescribed by the board for this purpose a certificate of compliance with the continuing education requirements necessary for license renewal as required by Section 40-2-380. In case of default in the payment of the license fee by a person, Section 40-2-280 applicable to certified public accountants and public accountants applies in all respects to accounting practitioners.

Section 40-2-570. (A) After notice and hearing pursuant to Section 40-2-310 the board may revoke a license or permit as accounting practitioner issued under this article; suspend a license or permit for a period of not more than five years; reprimand, censure, or limit the scope of practice of a license or permit holder; impose an administrative fine not exceeding one thousand dollars; or place a license or permit holder on probation, all with or without terms, conditions, and limitation, for any one or more of these reasons:

(1) fraud or deceit in obtaining a license or permit;

(2) cancellation, revocation, or suspension of, or refusal to renew authority to engage in the practice of public accountancy in another state, territory of the United States, or the District of Columbia for any cause;

(3) revocation or suspension of the right to practice before a state or federal agency;

(4) dishonesty, fraud, or gross negligence in the practice of public accounting or in filing or failure to file the license or permit holder's own income tax return;

(5) violation of a provision of this article or Article 1 or a regulation promulgated by the board under the authority granted by this chapter;

(6) violation of a rule of professional conduct promulgated by the board under the authority granted by this chapter;

(7) conviction of a felony, or any crime an element of which is dishonesty or fraud, under the laws of the United States, of this State, or another state if the acts involved would have constituted a crime under the laws of this State. The record of conviction or a copy of the record, certified by the clerk of court or the judge in whose court the conviction is had, is conclusive evidence of the conviction and `conviction' shall include a plea of guilty or a plea of nolo contendere;

(8) performance of a fraudulent act while holding a license or permit under this article; or

(9) conduct reflecting adversely upon the license or permit holder's fitness to engage in the practice of public accountancy.

(B) In lieu of or in addition to a remedy specifically provided in subsection (A), the board may require one or more of these requirements of a license or permit holder:

(1) a quality review conducted in a fashion as the board may require; or

(2) satisfactory completion of continuing professional education programs as the board may specify.

A `quality review' means a study, appraisal, or review of one or more aspects of the professional work of a person or firm in the practice of public accountancy by a person or persons who hold certificates or licenses and who are not affiliated with the person or firm being reviewed.

(C) In a proceeding in which a remedy imposed by subsections (A) and (B) is imposed, the board also may require the respondent license or permit holder to pay the costs of the proceeding.

Section 40-2-580. The board may initiate proceedings under this article on its own motion or on the complaint of a person, and the procedures provided in Article 1 for these proceedings are applicable and binding in procedures under this article.

Section 40-2-590. A person who violates a provision of this article is guilty of a misdemeanor and, upon conviction, must be fined not less than fifty dollars or more than two hundred dollars or imprisoned not less than twenty days or more than sixty days. Each violation constitutes a separate offense and each day's violation constitutes a separate offense.

Section 40-2-600. Nothing contained in this article may be construed to prohibit the formation of partnerships by and between public accountants and accounting practitioners if all members of the partnerships and all resident managers of offices of the partnerships are licensed under this chapter as public accountants or accounting practitioners and if the partnerships apply for an annual permit in the manner prescribed in this article for other partnerships."

General powers and duties, occupational and professional licensing boards

SECTION 2. Chapter 1, as amended, Title 40 of the 1976 Code is further amended to read:

"CHAPTER 1

Professions and Occupations

Article 1

Board Regulation of Professions and Occupations

Section 40-1-10. (A) The right of a person to engage in a lawful profession, trade, or occupation of choice is clearly protected by both the Constitution of the United States and the Constitution of the State of South Carolina. The State cannot abridge this right except as a reasonable exercise of its police powers when it is clearly found that abridgement is necessary for the preservation of the health, safety, and welfare of the public.

(B) No statute or regulation may be imposed under this article upon a profession or occupation except for the exclusive purpose of protecting the public interest when the:

(1) unregulated practice of the profession or occupation can harm or endanger the health, safety, or welfare of the public and the potential for harm is recognizable and not remote or dependent upon tenuous argument;

(2) practice of the profession or occupation has inherent qualities peculiar to it that distinguish it from ordinary work or labor;

(3) practice of the profession or occupation requires specialized skill or training and the public needs and will benefit by assurances of initial and continuing professional and occupational ability; and

(4) public is not effectively protected by other means.

(C) If the General Assembly determines that a particular profession or occupation should be regulated or that a different degree of regulation should be imposed on the regulated profession or occupation, it shall consider the following degrees of regulation in the order provided and only shall regulate the profession or occupation to the degree necessary to fulfill the need for regulation:

(1) If existing common law and statutory causes of civil action or criminal prohibitions are not sufficient to eradicate existing harm or prevent potential harm, the General Assembly first may consider making statutory changes to provide stricter causes for civil action and criminal prosecution.

(2) If it is necessary to determine the impact of the operation of a profession or occupation on the public, the General Assembly may consider implementing a system of registration.

(3) If the public requires a substantial basis for relying on the professional services of the practitioner, the General Assembly may consider implementing a system of certification.

(4) If adequate regulation cannot be achieved by means less than licensing, the General Assembly may establish licensing procedures.

(D) In determining the proper degree of regulation, if any, the General Assembly shall determine:

(1) whether the practitioner, if unregulated, performs a service to individuals involving a hazard to the public health, safety, or welfare;

(2) what the opinion of a substantial portion of the people who do not practice the particular profession, trade, or occupation is on the need for regulation;

(3) the number of states which have regulatory provisions similar to those proposed;

(4) whether there is sufficient demand for the service for which there is no regulated substitute, and this service is required by a substantial portion of the population;

(5) whether the profession or occupation requires high standards of public responsibility, character, and performance of each individual engaged in the profession or occupation, as evidenced by established and published codes of ethics;

(6) whether the profession or occupation requires such skill that the public generally is not qualified to select a competent practitioner without some assurance that the practitioner has met minimum qualifications;

(7) whether the professional or occupational associations do not adequately protect the public from incompetent, unscrupulous, or irresponsible members of the profession or occupation;

(8) whether current laws which pertain to public health, safety, and welfare generally are ineffective or inadequate;

(9) whether the characteristics of the profession or occupation make it impractical or impossible to prohibit those practices of the profession or occupation which are detrimental to the public health, safety, and welfare;

(10) whether the practitioner performs a service for others which may have a detrimental effect on third parties relying on the expert knowledge of the practitioner.

Section 40-1-20. As used in this title unless the context requires a different meaning:

(1) `Administrator' means the individual to whom the director has delegated authority to administer the programs of a specific board or of a professional or occupational group for which the department has regulatory authority or has delegated authority to administer the programs of a specific board;

(2) `Authorization to practice' or `Practice authorization' means the approval to practice the specified profession, engage in the specified occupation, or use a title protected under this article, which has been granted by the applicable board. This authorization is granted in the form of a license, permit, certification, or registration;

(3) `Board' or `Commission' means the group of individuals charged by law with the responsibility of licensing or otherwise regulating an occupation or profession within the State. Except as otherwise indicated, `board' is used in this article to refer to both boards and commissions;

(4) `Department' means the Department of Labor, Licensing and Regulation;

(5) `Director' means the Director of the Department of Labor, Licensing and Regulation or the director's official designee;

(6) `Licensee' means a person granted an authorization to practice pursuant to this article and refers to a person holding a license, permit, certification, or registration granted pursuant to this article;

(7) `Licensing act' means the individual statute or regulations, or both, of each regulated profession or occupation which include, but are not limited to, board governance, the qualifications and requirements for authorization to practice, prohibitions, and disciplinary procedures;

(8) `Person' means an individual, partnership, or corporation;

(9) `Profession' or `occupation' means a profession or occupation regulated or administered, or both, by the department pursuant to this article.

Section 40-1-30. It is unlawful for a person to engage in a profession or occupation regulated by a board or commission administered by the Department of Labor, Licensing and Regulation without holding a valid authorization to practice as required by statute or regulation.

An authorization to practice issued pursuant to this title is valid for up to two years and is renewable on renewal dates as established by the Director of Labor, Licensing and Regulation with the consent of each applicable regulatory board.

Section 40-1-40. (A) The purpose of the Division of Professional and Occupational Licensing, South Carolina Department of Labor, Licensing and Regulation, is to protect the public through the regulation of professional and occupational licensees and the administration of boards charged with the regulation of professional and occupational practitioners.

(B) The following boards and the professions and occupations they license or otherwise regulate must be administered by the Department of Labor, Licensing and Regulation pursuant to this article:

Board of Accountancy

Board of Architectural Examiners

Athletic Commission

Auctioneers Commission

Board of Barber Examiners

Board for Barrier-Free Design

Building Code Council

Board of Chiropractic Examiners

Contractors' Licensing Board

Board of Cosmetology

Board of Dentistry

Engineers and Land Surveyors Board

Environmental Certification Board

Board of Registration for Foresters

Board of Funeral Service

Board of Registration for Geologists

Manufactured Housing Board

Board of Medical Examiners

Modular Buildings Board of Appeals

Board of Nursing

Long Term Health Care Administrators Board

Board of Occupational Therapy

Board of Examiners in Opticianary

Board of Examiners in Optometry

Board of Pharmacy

Board of Physical Therapy Examiners

Pilotage Commission

Board of Podiatry Examiners

Board of Examiners for Licensure of Professional Counselors and Marital and Family Therapists

Board of Examiners in Psychology

Board of Pyrotechnic Safety

Real Estate Appraisers Board

Real Estate Commission

Residential Builders Commission

Board of Social Work Examiners

Board of Examiners in Speech-Language Pathology and Audiology

Board of Veterinary Medical Examiners

(C) Each regulatory board within the department is a separate board.

(D) The Department of Labor, Licensing and Regulation is a member of the Governor's executive cabinet and must be headed by a director who must be appointed by the Governor with the advice and consent of the Senate, subject to removal from office by the Governor pursuant to Section 1-3-240(B). The director shall supervise the department under the direction and control of the Governor and shall exercise other powers and perform other duties as the Governor requires.

Section 40-1-45. The department, in consultation with currently serving board members, the Office of the Governor, members of professional and industry associations, and the general public shall encourage public and consumer membership and participation on all boards and panels associated with the department. Public and consumer membership may not include current or former, active or inactive members of the profession or occupation being regulated. Public and consumer members have the same rights and responsibilities as professionally or occupationally-related board members and shall participate fully in all discussions, deliberations, decisions, and votes of the board or panel on which they serve unless otherwise prohibited by statute or regulation.

Section 40-1-50. (A) The department is responsible for all administrative, fiscal, investigative, inspectional, clerical, secretarial, and license renewal operations and activities of the boards and commissions enumerated in Section 40-1-40.

The director shall employ and supervise personnel necessary to effectuate the provisions of this article for each board provided for in Section 40-1-40. When hiring a person charged with evaluating or administering professional qualifications or licensing standards, the director must select from a list of three candidates submitted by the appropriate licensing board. However, a candidate whose name is submitted to the director must be chosen from a list of all candidates found to be qualified by the Human Management Office of the department. The authority to remove an employee of the department is vested with the Director of the Department of Labor, Licensing and Regulation.

The director shall establish compensation for personnel assigned to the boards as the director considers necessary and appropriate for the administration of this article. Compensation and necessary expenses incurred in the performance of duties by personnel assigned to the board must be paid as an expense of the board in the administration of this article.

The director shall enter into contracts and agreements the director considers necessary or incidental to carry out the provisions of this article to provide for all services required by each board.

Board members must be compensated for their services at the usual rate for mileage, subsistence, and per diem as provided by law for members of state boards, committees, and commissions and may be reimbursed for actual and necessary expenses incurred in connection with and as a result of their work as members of the board. The director, within the limits set by the Comptroller General, shall establish reimbursement standards for travel and other expenses incurred by a board member in the performance of the board member's official duties. Compensation and reimbursements paid to board members under this subsection must be paid as an expense of the board in the administration of this article and the board's chapter and must be paid from the fees received by the board pursuant to the provisions of this article or in a manner prescribed by the Department of Labor, Licensing and Regulation.

The director shall maintain a separate account for funds collected on behalf of a board and shall indicate the expenses allotted to the board. The director shall adjust fees for revenue-funded boards in accordance with Section 40-1-50 (D).

The director annually shall prepare a report to the Governor and the General Assembly indicating those regulated trades, occupations, and professions that do not meet the spirit and intent of Section 40-1-10.

The director may perform any additional administrative functions requested by the boards.

(B) The department shall keep a record of the proceedings of each board and shall maintain a registry of all applications for licensure, permitting, certification, and registration. The registry shall include the name, age, and last known address of each applicant, the place of business of the applicant, the education, experience, and other qualifications of the applicant, type of examination required, whether or not an authorization to practice was granted, the date of the action of the department, and other information considered necessary by the board.

Except as otherwise required by law, the record of a board's proceedings and its registry of applicants must be open to public inspection, and a copy of the registry must be provided upon request and payment of a fee.

Records of a board and its registry are prima facie evidence of its proceedings, and a copy certified by the administrator or the director under seal is admissible as evidence with the same force and effect as the original.

(C) The department may prepare and publish a roster for each respective board containing the names and places of business of persons licensed under this article. A copy of the roster must be provided upon request and upon payment of a fee which may not exceed the cost of printing and distribution of the roster.

(D) Initial fees for revenue-funded boards must be established by each board and shall serve as the base for necessary administrative adjustments. Each board, on at least a biennial basis, shall provide the director with a statement of anticipated expenditures, program changes, and other information as may be used in determining fees for the next biennial period.

Fees for revenue-funded boards must be assessed, collected, and adjusted on behalf of each board by the department in accordance with this article. Fees may be adjusted biennially to ensure that they are sufficient but not excessive to cover expenses including the total of the direct and indirect costs to the State for the operations of each respective board. Fees must be deposited in accounts established for each respective board.

The following steps must be used in the development and analysis of fee structures:

(1) Determine current financial position of the program. Each month, the department's administrative section shall prepare statements reflecting monthly revenue collection activity and related program expenses for each board program. The financial standing of a board program must be reviewed each biennium for boards that renew biennially, annually for boards that renew on an annual basis, and more frequently if indicators evidence a significant financial fluctuation of more than ten percent variance between a program's revenue and related expenses;

(2) Project future activity and related costs of the program. By reviewing historical volume information and adjusting trends to reflect changes in the industry, changes in the program, indicators from the board members to the staff, and general economic indicators, project program activity including, but not limited to, renewals and new applicants for the upcoming two to three years. Based on these population projections, forecast program revenues using the current fee structure. With input from the board and the staff, analyze related program direct board costs for the upcoming two to three years, based on historical trends, changes in program requirements, changes to expenditure centers, and changes in staffing requirements. To these direct costs, add the program's proportionate share of other related costs of the program including, but not limited to, administration of exams, agency administration, and information systems to arrive at the total program cost;

(3) Determine the projected financial position of the program, propose changes where necessary, and compare the total projected revenue at the current fees to the total projected costs of the program over the next two to three years. If the current fees and the projected program activity do not support the projected program's expenses, develop alternative fee structures which would ensure the program's continuing financial stability as required by law;

(4) Present findings to the director and staff for discussion, revision, evaluation, and adoption. While developing fee analyses, maintain communications with staff and agency management to ensure all necessary factors are evaluated and cost savings, efficiencies, and alternative cost reduction scenarios are pursued. Present fee analyses to board staff and management for discussion and revision where necessary. Propose alternatives to the director for consideration when preparing to adopt proposed fee schedules to achieve a structure sufficient to support the program.

Fees for a board funded by general appropriations must be set by the General Assembly and deposited into the general fund. All fees are nonrefundable.

(E) Where appropriate, the director shall adopt the necessary procedures to implement the biennial renewal of authorizations to practice in a manner as to ensure that the number of renewals is reasonably evenly distributed throughout each two-year period. During any transition, fees must be proportionate to the biennial fee.

(F) A board may elect to delegate to the department the authority to issue an authorization to practice to an applicant whose proof of qualifications falls within established guidelines set by the board.

A board may elect to delegate to the department the authority to deny an authorization to practice to an applicant who has committed an act that would be grounds for disciplinary action under this article or the licensing act of the board, who has failed to comply with a final order of a board, or who has failed to demonstrate the basic qualifications or standards for practice authorization contained in the board's licensing act. The applicant may appeal the denial to the board which has final regulatory decision-making authority for reconsideration. The board may uphold the denial, order issuance of the authorization to practice, or order issuance of the authorization to practice upon conditions set by the board. If the administrative decision is upheld, the applicant may reapply at the end of a twelve-month period.

(G) The department shall suspend the practice authorization issued by a board administered by this article to a person who submits a check, money draft, or similar instrument for payment of a fee which is not honored by the financial institution named. The suspension becomes effective ten days following delivery by certified mail of written notice of the dishonor and the impending suspension to the person's address. Upon notification of suspension, the person may reinstate the authorization to practice upon payment of the fee and penalties required under statute or regulation. This suspension is exempt from the Administrative Procedures Act.

(H) The department shall revoke the authorization to practice of a person found to be in violation of the Family Independence Act as it relates to child support enforcement requirements.

(I) The department may prepare an annual report for submission to the Governor.

It is the duty of the director to notify and seek approval of the board or commission at least thirty days in advance of filing with Legislative Council as required by Section 1-23-30 of any proposed changes in any rules or regulations which may affect the practice or service of the respective licensing board or commission.

Section 40-1-60. (A) A board annually shall elect from among its members a chairman, vice-chairman, and other officers as the board determines necessary. The board shall adopt rules and procedures reasonably necessary for the performance of its duties and the governance of its operations and proceedings.

(B) A board shall meet at least two times a year and at other times upon the call of the chairman or a majority of the board.

(C) A majority of the members of a board constitutes a quorum; however, if there is a vacancy on the board, a majority of the members serving constitutes a quorum.

(D) A board member is required to attend meetings or to provide proper notice and justification of inability to do so. Unexcused absences from meetings may result in removal from the board as provided for in Section 1-3-240.

Section 40-1-70. The powers and duties of regulatory boards include, but are not limited to:

(1) determining the eligibility of applicants for examination and licensure;

(2) examining applicants for licensure including, but not limited to:

(a) prescribing the subjects, character, and manner of licensing examinations;

(b) preparing, administering, and grading the examination or assisting in the selection of a contractor for the preparation, administration, or grading of the examination;

(3) establishing criteria for issuing, renewing, and reactivating the authorizations to practice of qualified applicants, including the issuance of active or permanent, temporary, limited, and inactive licenses, or other categories as may be created;

(4) adopting a code of professional ethics appropriate to the profession or occupation which it licenses or regulates;

(5) evaluating and approving continuing education course hours and programs;

(6) conducting hearings on alleged violations of this article and regulations promulgated under this article;

(7) resolving consumer complaints, where appropriate and possible;

(8) disciplining persons licensed under this article in a manner provided for in this article;

(9) promulgating regulations which have been submitted to the director, at least thirty days in advance of filing with Legislative Council as required by Section 1-23-30.

Section 40-1-80. (A) If the director has reason to believe that a person has violated a provision of this article or a regulation promulgated under this article or the licensing act or regulation of a board or that a licensee has become unfit to practice the profession or occupation or if a person files a written complaint with the board or the director charging a person with the violation of a provision of this article or a regulation promulgated under this article, the director may initiate an investigation.

(B) In conducting the investigation, the director may subpoena witnesses, compel their attendance, take evidence, and require the production of any matter which is relevant to the investigation including, but not limited to, the existence, description, nature, custody, condition, and location of books, documents, or other tangible items and the identity and location of persons having knowledge of relevant facts or any other matter reasonably calculated to lead to the discovery of material evidence. Upon failure to obey a subpoena or to answer questions propounded by the director, the director may apply to an administrative law judge for an order requiring the person to comply.

Section 40-1-90. (A) The results of an investigation must be presented to the board. If from these results it appears that a violation has occurred or that a licensee has become unfit to practice the profession or occupation, the board, in accordance with the Administrative Procedures Act, may take disciplinary action authorized by Section 40-1-120. No disciplinary action may be taken unless the matter is presented to and voted upon by the board. The board may designate a hearing officer or hearing panel to conduct hearings or take other action as may be necessary under this section.

(B) For the purpose of a proceeding under this article, the department may administer oaths and issue subpoenas for the attendance and testimony of witnesses and the production and examination of books, papers, and records on behalf of the board or, upon request, on behalf of a party to the case. Upon failure to obey a subpoena or to answer questions propounded by the board or its hearing officer or panel, the board may apply to an administrative law judge for an order requiring the person to comply with the subpoena.

Section 40-1-100. (A) When the board has reason to believe that a person is violating or intends to violate a provision of this article or a regulation promulgated under this article, in addition to all other remedies, it may order the person immediately to cease and desist from engaging in the conduct. If the person is practicing a profession or occupation without being licensed under this article, is violating a board order, a provision of this article, or a regulation promulgated under this article, the board also may apply, in accordance with the rules of the Administrative Law Judge Division, to an administrative law judge for a temporary restraining order.

No board member or the Director of the Department of Labor, Licensing and Regulation or another employee of the department may be held liable for damages resulting from a wrongful temporary restraining order.

(B) The board may seek from an administrative law judge other equitable relief to enjoin the violation or intended violation of this article or a regulation promulgated under this article.

Section 40-1-110. In addition to other grounds contained in this article and the respective board's chapter:

(1) A board may cancel, fine, suspend, revoke, or restrict the authorization to practice of an individual who:

(a) used a false, fraudulent, or forged statement or document or committed a fraudulent, deceitful, or dishonest act or omitted a material fact in obtaining licensure under this article;

(b) has had a license to practice a regulated profession or occupation in another state or jurisdiction canceled, revoked, or suspended or who has otherwise been disciplined;

(c) has intentionally or knowingly, directly or indirectly, violated or has aided or abetted in the violation or conspiracy to violate this article or a regulation promulgated under this article;

(d) has intentionally used a fraudulent statement in a document connected with the practice of the individual's profession or occupation;

(e) has obtained fees or assisted in obtaining fees under fraudulent circumstances;

(f) has committed a dishonorable, unethical, or unprofessional act that is likely to deceive, defraud, or harm the public;

(g) lacks the professional or ethical competence to practice the profession or occupation;

(h) has been convicted of or has pled guilty to or nolo contendere to a felony or a crime involving drugs or moral turpitude;

(i) has practiced the profession or occupation while under the influence of alcohol or drugs or uses alcohol or drugs to such a degree as to render him unfit to practice his profession or occupation;

(j) has sustained a physical or mental disability which renders further practice dangerous to the public;

(k) violates a provision of this article or of a regulation promulgated under this article;

(l) violates the code of professional ethics adopted by the applicable licensing board for the regulated profession or occupation or adopted by the department with the advice of the advisory panel for the professions and occupations it directly regulates.

Each incident is considered a separate violation.

Section 40-1-115. A board has jurisdiction over the actions committed or omitted by current and former licensees during the entire period of licensure. The board has jurisdiction to act on any matter which arises during the practice authorization period.

Section 40-1-120. (A) Upon a determination by a board that one or more of the grounds for discipline exists, in addition to the actions the board is authorized to take pursuant to its respective licensing act, the board may:

(1) issue a public reprimand;

(2) impose a fine not to exceed five hundred dollars unless otherwise specified by statute or regulation of the board;

(3) place a licensee on probation or restrict or suspend the individual's license for a definite or indefinite time and prescribe conditions to be met during probation, restriction, or suspension including, but not limited to, satisfactory completion of additional education, of a supervisory period, or of continuing education programs;

(4) permanently revoke the license.

(B) A decision by a board to discipline a licensee as authorized under this section must be by a majority vote of the total membership of the board serving at the time the vote is taken.

(C) A final order of a board disciplining a licensee under this section is public information.

(D) Upon a determination by a board that discipline is not appropriate, the board may issue a nondisciplinary letter of caution.

(E) A board may establish a procedure to allow a licensee who has been issued a public reprimand to petition the board for expungement of the reprimand from the licensee's record.

Section 40-1-130. A board may deny an authorization to practice to an applicant who has committed an act that would be grounds for disciplinary action under this article or the licensing act of the respective board. A board must deny authorization to practice to an applicant who has failed to demonstrate the qualifications or standards for licensure contained in the respective board's licensing act. The applicant shall demonstrate to the satisfaction of the board that the applicant meets all the requirements for the issuance of a license.

Section 40-1-140. A person may not be refused an authorization to practice, pursue, or engage in a regulated profession or occupation solely because of a prior criminal conviction unless the criminal conviction directly relates to the profession or occupation for which the authorization to practice is sought. However, a board may refuse an authorization to practice if, based upon all information available, including the applicant's record of prior convictions, it finds that the applicant is unfit or unsuited to engage in the profession or occupation.

Section 40-1-150. A licensee who is under investigation for a violation provided for in Section 40-1-110 or the licensing act of the applicable board for which disciplinary action may be taken may voluntarily surrender authorization to practice to the board. The voluntary surrender invalidates the authorization to practice at the time of its relinquishment, and no person whose authorization to practice is surrendered voluntarily may practice the profession or occupation unless the board, by a majority vote, reinstates the license. A person practicing a regulated profession or occupation during the period of voluntary surrender is considered an illegal practitioner and is subject to the penalties provided by this article. The surrender of an authorization to practice may not be considered an admission of guilt in a proceeding under this article and does not preclude the board from taking disciplinary action against the licensee as provided for in this article or the board's licensing act including, but not limited to, imposing conditions that must be met before the board reinstates the license.

Section 40-1-160. A person aggrieved by a final action of a board may appeal the decision to the Administrative Law Judge Division in accordance with the Administrative Procedures Act and the rules of the Administrative Law Judge Division. Service of a petition requesting a review does not stay the board's decision pending completion of the appellate process.

Section 40-1-170. (A) In an order issued in resolution of a disciplinary proceeding before a board, a licensee found in violation of the applicable licensing act may be directed to pay a sum not to exceed the reasonable costs of the investigation and prosecution of the case in addition to other sanctions.

(B) A certified copy of the actual costs, or a good faith estimate of costs where actual costs are not available, signed by the director, or the director's designee, is prima facie evidence of reasonable costs.

(C) Failure to make timely payment in accordance with the order results in the collection of costs in accordance with Section 40-1-180.

(D) The board may conditionally renew or reinstate for a maximum of one year the license of an individual who demonstrates financial hardship and who enters into a formal agreement to reimburse the board within that one-year period for the unpaid costs.

(E) This section does not apply to a regulated profession or occupation if a specific provision in the applicable licensing act provides for recovery of costs in an administrative disciplinary proceeding.

Section 40-1-180. (A) All costs and fines imposed pursuant to this article and the respective boards' licensing acts are due and payable immediately upon imposition or at the time indicated by final order of the board. Unless the costs and fines are paid within sixty days after the order becomes final, the order becomes a judgment and may be filed and executed upon in the same manner as a judgment in the court of common pleas, and the board may collect costs and attorneys' fees incurred in executing the judgment. Interest at the legal rate accrues on the amount due from the date imposed until the date paid.

(B) All fines and costs collected under this section must be remitted by the department to the State Treasurer and deposited in a special fund established for the department to defray the administrative costs associated with investigations and hearings under this article.

Section 40-1-190. (A) A communication, whether oral or written, made by or on behalf of a person, to the director or board or a person designated by the director or board to investigate or hear matters relating to discipline of a licensee, whether by way of complaint or testimony, is privileged and no action or proceeding, civil or criminal, may be brought against the person, by or on whose behalf the communication is made, except upon proof that the communication was made with malice.

(B) Nothing in this article may be construed as prohibiting the respondent or the respondent's legal counsel from exercising the respondent's constitutional right of due process under the law or as prohibiting the respondent from normal access to the charges and evidence filed against the respondent as part of due process under the law.

(C) Notwithstanding the provisions of this section, a final order of a board disciplining a licensee is public information as provided for in Section 40-1-120.

Section 40-1-200. A person who practices or offers to practice a regulated profession or occupation in this State in violation of this article or who knowingly submits false information for the purpose of obtaining a license is guilty of a misdemeanor and, upon conviction, must be imprisoned not more than one year or fined not more than fifty thousand dollars.

Section 40-1-210. The department, in addition to instituting a criminal proceeding, may institute a civil action through the Administrative Law Judge Division, in the name of the State, for injunctive relief against a person violating this article, a regulation promulgated under this article, or an order of the board. For each violation the administrative law judge may impose a fine of no more than ten thousand dollars.

Section 40-1-220. If a provision of this article or the application of a provision of this article to a person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this statute which can be given effect without the invalid provision or application, and to this end the provisions of this statute are severable."

Repeal

SECTION 3. Chapter 73, Title 40 of the 1976 Code is repealed.

Time effective

SECTION 4. This act takes effect upon approval by the Governor.

In the Senate House June 13, 1996.

Robert L. Peeler,

President of the Senate

David H. Wilkins,

Speaker of the House of

Representatives

Became law without the signature of the Governor -- 6/20/96.

Printer's Date -- June 25, 1996 -- S.

---XX---