South Carolina General Assembly
116th Session, 2005-2006

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A128, R161, S95

STATUS INFORMATION

General Bill
Sponsors: Senators McConnell, Sheheen, Knotts and Elliott
Document Path: l:\s-jud\bills\mcconnell\jud0028.gfm.doc

Introduced in the Senate on January 11, 2005
Introduced in the House on February 2, 2005
Last Amended on May 25, 2005
Passed by the General Assembly on June 1, 2005
Governor's Action: June 7, 2005, Signed

Summary: Procedure for Consumer Affairs to request hearing by administrative law judge division

HISTORY OF LEGISLATIVE ACTIONS

     Date      Body   Action Description with journal page number
-------------------------------------------------------------------------------
  12/15/2004  Senate  Prefiled
  12/15/2004  Senate  Referred to Committee on Judiciary
   1/11/2005  Senate  Introduced and read first time SJ-129
   1/11/2005  Senate  Referred to Committee on Judiciary SJ-129
   1/26/2005  Senate  Committee report: Favorable with amendment Judiciary 
                        SJ-20
   1/27/2005  Senate  Amended SJ-21
   1/27/2005  Senate  Read second time SJ-21
   1/28/2005          Scrivener's error corrected
    2/1/2005  Senate  Read third time and sent to House SJ-13
    2/2/2005  House   Introduced and read first time HJ-9
    2/2/2005  House   Referred to Committee on Judiciary HJ-11
    2/3/2005          Scrivener's error corrected
   5/18/2005  House   Committee report: Favorable with amendment Judiciary 
                        HJ-144
   5/24/2005  House   Amended HJ-42
   5/24/2005  House   Read second time HJ-78
   5/25/2005  House   Read third time and returned to Senate with amendments 
                        HJ-24
   5/25/2005  Senate  House amendment amended SJ-160
   5/25/2005  Senate  Returned to House with amendments SJ-160
   5/31/2005  House   Debate adjourned on Senate amendments until Wednesday, 
                        June 1, 2005 HJ-110
    6/1/2005  House   Concurred in Senate amendment and enrolled HJ-23
    6/2/2005          Ratified R 161
    6/7/2005          Signed By Governor
   6/13/2005          Copies available
   6/13/2005          Effective date See Act for Effective Date
   6/16/2005          Act No. 128

View the latest legislative information at the LPITS web site

VERSIONS OF THIS BILL

12/15/2004
1/26/2005
1/27/2005
1/28/2005
2/3/2005
5/18/2005
5/24/2005
5/25/2005


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

(A128, R161, S95)

AN ACT TO AMEND SECTION 16-17-445, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO REGULATION OF UNSOLICITED CONSUMER TELEPHONE CALLS AND SECTION 34-36-40, RELATING TO LOAN BROKERS, BOTH SO AS TO PROVIDE A PROCEDURE FOR THE DEPARTMENT OF CONSUMER AFFAIRS TO REQUEST A HEARING BEFORE THE ADMINISTRATIVE LAW COURT AND TO PROVIDE THAT THE DEPARTMENT MAY REQUEST THAT THE ADMINISTRATIVE LAW JUDGE DIVISION IMPOSE A CIVIL FINE FOR A VIOLATION; TO AMEND SECTION 37-6-106, RELATING TO THE INVESTIGATORY POWERS OF THE ADMINISTRATOR OF THE DEPARTMENT OF CONSUMER AFFAIRS, SO AS TO PROVIDE THAT THE ADMINISTRATOR MAY APPLY TO THE ADMINISTRATIVE LAW COURT, RATHER THAN THE COURT OF COMMON PLEAS, FOR AN ORDER COMPELLING COMPLIANCE WITH A SUBPOENA; TO AMEND SECTIONS 37-6-108 AND 37-6-113, BOTH AS AMENDED AND RELATING TO AN ORDER OF THE ADMINISTRATOR OF THE DEPARTMENT OF CONSUMER AFFAIRS, SO AS TO PROVIDE A PROCEDURE FOR THE ADMINISTRATOR TO REQUEST A HEARING BEFORE THE ADMINISTRATIVE LAW COURT AND TO PROVIDE FOR JUDICIAL REVIEW OF THE ADMINISTRATIVE LAW COURT'S ORDER AS PROVIDED IN THE ADMINISTRATIVE PROCEDURES ACT AND THE RULES GOVERNING PRACTICE BEFORE THE ADMINISTRATIVE LAW COURT; TO AMEND SECTION 37-6-401, RELATING TO THE POWERS OF THE ADMINISTRATOR OF THE DEPARTMENT OF CONSUMER AFFAIRS, SO AS TO PROVIDE THAT A CONFLICT BETWEEN THE PROVISIONS OF PART 4, CHAPTER 6, TITLE 37 AND THE ADMINISTRATIVE PROCEDURES ACT MUST BE RESOLVED IN FAVOR OF THE LATTER; TO AMEND SECTION 37-6-414, RELATING TO JUDICIAL REVIEW OF CASES, SO AS TO PROVIDE THAT A PERSON WHO HAS EXHAUSTED ADMINISTRATIVE REMEDIES BEFORE THE ADMINISTRATOR AND WHO IS AGGRIEVED IS ENTITLED TO BRING A CONTESTED CASE HEARING BEFORE THE ADMINISTRATIVE LAW COURT; TO AMEND SECTION 37-16-70, RELATING TO PREPAID LEGAL SERVICES, SO AS TO PROVIDE FOR NOTICE AND OPPORTUNITY FOR A HEARING BEFORE THE ADMINISTRATIVE LAW COURT BY A PREPAID LEGAL SERVICES COMPANY FOR A VIOLATION OF THE PROVISIONS OF THE CHAPTER, TO PROVIDE THAT THE ADMINISTRATOR OF THE DEPARTMENT OF CONSUMER AFFAIRS MAY ISSUE AN ORDER REQUIRING THE CLUB REPRESENTATIVE TO CEASE AND DESIST FROM THE VIOLATION, AND TO PROVIDE THAT THE CLUB REPRESENTATIVE MAY REQUEST A HEARING BEFORE THE ADMINISTRATIVE LAW COURT; TO AMEND SECTIONS 39-61-100 AND 39-61-130, BOTH AS AMENDED, RELATING TO MOTOR CLUB SERVICES, SO AS TO PROVIDE A PROCEDURE FOR THE ADMINISTRATOR OF THE DEPARTMENT OF CONSUMER AFFAIRS TO REQUEST A HEARING BEFORE THE ADMINISTRATIVE LAW COURT AND TO PROVIDE FOR JUDICIAL REVIEW OF THE ADMINISTRATIVE LAW COURT'S ORDER AS PROVIDED IN THE ADMINISTRATIVE PROCEDURES ACT AND THE RULES GOVERNING PRACTICE BEFORE THE ADMINISTRATIVE LAW COURT; TO AMEND SECTION 40-39-150, RELATING TO PAWNBROKERS, SECTIONS 40-58-55, 40-58-80, AND 40-58-90, AS AMENDED, ALL RELATING TO MORTGAGE LOAN BROKERS, SECTION 40-68-160, RELATING TO REGULATION OF STAFF LEASING SERVICES, SECTION 44-79-80, RELATING TO PHYSICAL FITNESS SERVICES, SECTION 56-28-110, RELATING TO NOTIFICATION OF SUBSEQUENT PURCHASERS OF A REPURCHASED MOTOR VEHICLE, AND SECTIONS 59-102-70 AND 59-102-170, RELATING TO REGISTRATION OF ATHLETE AGENTS, ALL SO AS TO PROVIDE A PROCEDURE FOR A HEARING BEFORE THE ADMINISTRATIVE LAW COURT AND TO PROVIDE FOR JUDICIAL REVIEW OF THE ADMINISTRATIVE LAW COURT'S ORDER AS PROVIDED IN THE ADMINISTRATIVE PROCEDURES ACT AND THE RULES GOVERNING PRACTICE BEFORE THE ADMINISTRATIVE LAW COURT; TO AMEND SECTION 37-11-100, RELATING TO LICENSING OF A CONTINUING CARE COMMUNITY, SO AS TO PROVIDE FOR A CONTESTED CASE HEARING BEFORE THE ADMINISTRATIVE LAW COURT FOR ENFORCEMENT; TO AMEND SECTION 37-6-402, RELATING TO ENFORCEMENT BY THE DEPARTMENT, SO AS TO DEFINE "CONTESTED CASE"; TO AMEND SECTION 1-23-660, RELATING TO A CONTESTED CASE HEARING BEFORE AN ABOLISHED ENTITY, SO AS TO CREATE THE DIVISION OF MOTOR VEHICLE HEARINGS WITHIN THE ADMINISTRATIVE LAW COURT AND TO PROVIDE FOR ITS COMPOSITION AND OPERATION; TO AMEND SECTION 56-5-2952, AS AMENDED, RELATING TO THE FILING FEE FOR A HEARING BEFORE THE DEPARTMENT OF MOTOR VEHICLES, SO AS TO INCREASE THE FEE AND PROVIDE FOR ITS RETENTION BY THE ADMINISTRATIVE LAW COURT; AND TO REPEAL SECTIONS 37-6-415 AND 37-11-110 RELATING TO APPEALS OF DECISIONS OF THE DEPARTMENT OF CONSUMER AFFAIRS.

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

Enforcement

SECTION    1.    Section 16-17-445(F) of the 1976 Code is amended to read:

"(F)    The department shall investigate any complaints received concerning violations of this section. If the department has reason to believe that there has been a violation of this section, it may request a contested case hearing before the Administrative Law Court to impose a civil penalty not to exceed one hundred dollars for a first violation, two hundred dollars for a second violation, and one thousand dollars for a third or subsequent violation. The department may also bring a civil action in the Court of Common Pleas seeking other relief, including injunctive relief, as the court considers appropriate against the telephone solicitor. In addition, a person who violates the provisions of this section is guilty of a misdemeanor and, upon conviction for a first or second offense, must be fined not more than two hundred dollars or imprisoned for not more than thirty days, and for a third or subsequent offense must be fined not less than two hundred dollars nor more than five hundred dollars or imprisoned for not more than thirty days. Each violation constitutes a separate offense for purposes of the civil and criminal penalties in this section."

Enforcement

SECTION    2.    Section 34-36-40 of the 1976 Code, as added by Act 452 of 1992, is amended to read:

"Section 34-36-40.    (A)    The department may investigate the actions of any person for compliance with this chapter.

(B)    The department may request a hearing before the Administrative Law Court for an order requiring a loan broker to cease and desist if it is determined that the loan broker has violated, is violating, or will violate a provision of this chapter, a regulation promulgated by the department, or a written agreement entered into with the department.

(C)    The department may request a hearing before the Administrative Law Court for an order requiring a loan broker to refund or reimburse any advance fee or any other fee taken in violation of Section 34-36-20 or taken as a result of a false, misleading, or deceptive representation as described in Section 34-36-20. Such an order may, but need not, be sought by the department in conjunction with a cease and desist order pursuant to subsection (B).

(D)    The department may request a contested case hearing before the Administrative Law Court seeking the imposition of a civil administrative fine on behalf of the department against any person found to have violated any provision of this chapter, any regulation promulgated by the department, or any written agreement entered into with the department, in any amount not to exceed five thousand dollars for each violation."

Enforcement

SECTION    3.    Section 37-6-106(3) of the 1976 Code is amended to read:

"(3)    Upon failure without lawful excuse to obey a subpoena or to give testimony and upon reasonable notice to all persons affected, the administrator may apply to the Administrative Law Court for an order compelling compliance."

Enforcement

SECTION    4.    Section 37-6-108 of the 1976 Code, as last amended by Act 82 of 2001, is further amended to read:

"Section 37-6-108.    (A)    After notice, the administrator may order a creditor, a person acting on his behalf, or a person subject to this title to cease and desist from engaging in violations of this title. A respondent aggrieved by an order of the administrator may request a contested case before the Administrative Law Court in accordance with the Administrative Law Court's rules of procedure. The administrator may obtain an order from the Administrative Law Court for enforcement of his orders as provided in the Administrative Procedures Act and the Administrative Law Court's rules of procedure. The proceeding for enforcement must be initiated by filing a petition with the Administrative Law Court in accordance with the Administrative Law Court's rules of procedure, and copies of the request for a contested case hearing must be served upon all parties of record.

(B)    The jurisdiction of the Administrative Law Court is exclusive, and its final order may be appealed as provided in Sections 1-23-610 and 1-23-380.

(C)    A request for a contested case hearing pursuant to this section must be initiated within thirty days after a copy of the order of the administrator is received. If a request is not initiated, the administrator may move for an order from the Administrative Law Court for enforcement of his order upon a showing that the order was issued in compliance with this section, that a request for a contested case hearing was not initiated within thirty days after a copy of the order was received, and that the respondent is subject to the jurisdiction of the Administrative Law Court.

(D)    For purposes of this section and Sections 37-6-117 and 37-6-118, a violation of the South Carolina Unfair Trade Practices Act arising out of the production, promotion, or sale of consumer goods, services, or interests in land is considered a violation of this title subject to action by the administrator before the Administrative Law Court.

(E)    Unless otherwise specifically provided by law, the following administrative penalties may be levied against persons found to have engaged in violations of this title pursuant to subsection (A) of this section:

(1)    If the violator is found to have violated repeatedly and intentionally any provision of this title, the violator must be fined in an amount not to exceed two thousand five hundred dollars and not to exceed ten thousand dollars for any transaction or occurrence or set of transactions or occurrences which violated multiple provisions of this title.

(2)    If the violator is shown to have violated a previous lawful order of the tribunal of competent jurisdiction, the violator may be fined in an amount not to exceed five thousand dollars for each violation.

(3)    The penalties in items (1) and (2) of this subsection are in addition to any other penalties provided by law or any other remedies provided by law.

(F)    The administrative law judge may make findings and issue and enforce cease and desist orders regarding unconscionable conduct or unconscionable debt collection pursuant to this section, but the administrative law judge may not award damage, treble damage, or attorney's fee remedies to affected customers in these hearings."

Enforcement

SECTION    5.    Section 37-6-113 of the 1976 Code, as last amended by Act 82 of 2001, is further amended to read:

"Section 37-6-113.    (A)    After demand, the administrator may bring a civil action against a creditor or a person subject to this title to recover actual damages sustained and excess charges paid by one or more consumers who have a right to recover explicitly granted by this title. In a civil action pursuant to this subsection, penalties must not be recovered by the administrator. The court shall order amounts recovered pursuant to this subsection to be paid to each consumer or set off against his obligation. A consumer's action, except a class action, takes precedence over a prior or subsequent action by the administrator with respect to the claim of that consumer. A consumer's class action takes precedence over a subsequent action by the administrator with respect to claims common to both actions, but the administrator may intervene. An administrator's action on behalf of a class of consumers takes precedence over a consumer's subsequent class action with respect to claims common to both actions. Whenever an action takes precedence over another action pursuant to this subsection, the latter action may be stayed to the extent appropriate while the precedent action is pending and dismissed if the precedent action is dismissed with prejudice or results in a final judgment granting or denying the claim asserted in the precedent action. A defense available to a creditor in a civil action brought by a consumer is available to him in a civil action brought pursuant to this subsection.

(B)    The administrator may bring a civil action against a creditor, a person acting in his behalf, or a person subject to this title to recover a civil penalty of no more than five thousand dollars for repeatedly and intentionally violating this title. A civil penalty pursuant to this subsection must not be imposed for a violation of this title occurring more than two years before the action is brought.

(C)    The administrator may bring a civil action or an administrative action, as provided in Section 37-6-108, against a creditor for failure to file notification in accordance with the provisions on notification pursuant to Section 37-6-202 or to pay fees in accordance with the provisions on fees pursuant to Section 37-6-203 to recover the fees the defendant has failed to pay and a civil penalty in an amount determined by the court not exceeding the greater of three times the amount of fees the defendant has failed to pay or one thousand dollars."

Conflicting procedures

SECTION    6.    Section 37-6-401 of the 1976 Code is amended to read:

"Section 37-6-401.    This part applies to the administrator, prescribes the procedures to be observed by him in exercising his powers under this title, and supplements the provisions of the part on Powers and Functions of Administrator (Part 1) of this chapter and of the part on Supervised Loans (Part 5) of the Chapter on Loans (Chapter 3). A conflict between the provisions of this part and the Administrative Procedures Act pursuant to Chapter 23, Title 1 or the rules governing practice before the Administrative Law Court must be resolved in favor of the Administrative Procedures Act and the rules governing practice before the Administrative Law Court."

Contested case hearing

SECTION    7.    Section 37-6-414 of the 1976 Code is amended to read:

"Section 37-6-414.    (A)    A person who has exhausted all administrative remedies available before the administrator and who is aggrieved by the administrator's determination is entitled to a contested case hearing before the Administrative Law Court as provided in Section 1-23-600(D) and judicial review as provided in Sections 1-23-380(B) and 1-23-610. This section does not limit utilization of or the scope of judicial review available under other means of review, redress, relief, or trial de novo provided by law. A preliminary, procedural, or intermediate action or ruling of the Administrative Law Court is reviewable immediately if review of the final decision of the Administrative Law Court would not provide an adequate remedy.

(B)    Contested case proceedings are instituted by filing a request for a contested case hearing with the Administrative Law Court according to the rules of procedure of the Administrative Law Court. Copies of the request for a contested case hearing must be served upon the administrator and all parties of record. The final decision of the administrative law judge may be appealed as provided for in Sections 1-23-380 and 1-23-610."

Enforcement

SECTION    8.    Section 37-16-70 of the 1976 Code is amended to read:

"Section 37-16-70.    (A)    The department may file a request for a contested case hearing with the Administrative Law Court if a prepaid legal services company violates a provision of this chapter and the prepaid legal services company is subject to any combination of the following:

(1)    an administrative order to cease and desist from committing violations of this chapter;

(2)    administrative fines up to five thousand dollars; and

(3)    revocation or denial of registration.

(B)    Upon satisfactory evidence that a prepaid legal services company representative has violated or failed to comply with a provision of this chapter or regulation promulgated pursuant to the authority of this chapter, the administrator may issue an order requiring the company representative to cease and desist from engaging in the violation or revoke or suspend the company representative's authority. A prepaid legal services company representative may file a request for a contested case hearing with the Administrative Law Court if it believes it is aggrieved by the decision of the administrator."

Enforcement

SECTION    9.    Section 39-61-100 of the 1976 Code, as last amended by Act 142 of 1991, is further amended to read:

"Section 39-61-100.    (A)    The department may file a request for a contested case hearing with the Administrative Law Court for an order requiring the club to cease and desist or an order revoking, suspending, or vacating the certificate of authority of a club, if the Administrative Law Court finds, after a hearing, that the club:

(1)    has violated or failed to comply with any provisions of this chapter or regulations promulgated pursuant to the authority of this chapter;

(2)    has obtained a certificate of authority through wilful misrepresentation or fraud;

(3)    has engaged in fraudulent or deceptive practices;

(4)    has wilfully, orally or in writing, misrepresented the terms, benefits, privileges, and provisions of any service contract issued or to be issued by it or any other club;

(5)    is unable to meet its obligations as determined by generally accepted accounting principles;

(6)    has, after notice to the club of an alleged occurrence of any of items (1) through (5) of this section, refused without just cause to submit relevant information to the administrator with respect to the motor club services within this State.

(B)    Instead of revocation, suspension, or refusal to continue a certificate of authority for a violation or violations of items (1) through (6) of subsection (A) of this section, the administrative law judge may assess an administrative penalty of not less than one hundred nor more than one thousand dollars for each violation. An accumulation of these penalties may not exceed five thousand dollars for matters commenced in any calendar year. These penalties may be assessed in connection with orders to cease and desist."

Contested case hearing

SECTION    10.    Section 39-61-130 of the 1976 Code, as last amended by Act 155 of 1987, is further amended to read:

"Section 39-61-130.    Upon satisfactory evidence that a club representative has violated or failed to comply with a provision of this chapter or regulation promulgated pursuant to the authority of this chapter, the administrator may issue an order requiring the club representative to cease and desist from engaging in the violation or may revoke or suspend the club representative's authority. A club representative aggrieved by an action of the administrator taken pursuant to this provision may file a request for a contested case hearing with the Administrative Law Court."

Enforcement

SECTION    11.    Section 40-39-150 of the 1976 Code is amended to read:

"Section 40-39-150.    (A)    Upon finding that an action of a pawnbroker is in violation of the provisions of this chapter or of a law or regulation of this State or of the federal government or an agency of the state or federal government, the administrator may file a request with the Administrative Law Court for a contested case hearing in which the administrator may seek an order requiring the pawnbroker to cease and desist from the action.

(B)    The administrative law judge also may impose administrative fines of up to seven hundred fifty dollars for each offense upon persons violating any of the provisions of this chapter up to a maximum of fifteen thousand dollars for the same set of transactions or occurrences. Each violation constitutes a separate offense. In addition, a person violating the provisions of Sections 40-39-20 and 40-39-30 is guilty of a misdemeanor and, upon conviction, must be punished by a fine not exceeding one thousand dollars or by imprisonment for a term not exceeding sixty days, or both. The administrative law judge may revoke or suspend a pawnbroker's certificate of authority in addition to the penalties provided in this section."

Contested case hearing

SECTION    12.    Section 40-58-55 of the 1976 Code, as last amended by Act 7 of 2004, is further amended to read:

"Section 40-58-55.    (A)    Upon request for a contested case hearing by a person whose application for a license or renewal of a license has been denied, the Administrative Law Court may review the determination by the department that the applicant or his agent has:

(1)    violated a provision of this chapter or an order of the department;

(2)    withheld material information in connection with an application for a license or its renewal, or made a material misstatement in connection with the application;

(3)    been convicted of a felony or of an offense involving breach of trust, moral turpitude, fraud, or dishonest dealing within the past ten years.

(B)    A person who was in business as a mortgage broker or is an agent of a broker before October 1, 1998, and who has been convicted of a felony or an offense involving breach of trust, moral turpitude, fraud, or dishonest dealing within the past ten years may continue in business as a mortgage broker or agent, but if a mortgage broker or an agent of a broker is convicted of an offense enumerated in item (3) of subsection (A) on or after October 1, 1998, that person is subject to the provisions of this chapter."

Enforcement

SECTION    13.    Section 40-58-80 of the 1976 Code, as last amended by Act 7 of 2004, is further amended to read:

"Section 40-58-80.    (A)    Upon a finding that an action of a licensee may be in violation of this chapter, or of a law or regulation of this State or of the federal government or an agency of either, the department may file a request for a contested case hearing with the Administrative Law Court seeking an order to require the licensee to cease and desist from the action.

(B)    If an administrative law judge issues an order requiring the licensee to cease and desist from the action and the licensee fails to appeal the cease and desist order and continues to engage in the action in violation of the order, the licensee is subject to a penalty of not less than one thousand or more than two thousand five hundred dollars for each action the licensee takes in violation of the order. The penalty provision of this section is in addition to and not instead of other provisions of law applicable to a licensee.

(C)    The administrative law judge, upon a finding that a licensee has engaged intentionally or repeatedly in a course of conduct in violation of this chapter, may revoke the license temporarily or permanently in its discretion after reasonable notice and an opportunity to be heard and may increase the mortgage broker's required bond up to a maximum of twenty-five thousand dollars to ensure that the public is protected adequately. The administrative law judge also may impose upon persons violating the provisions of this chapter administrative fines of not more than five hundred dollars for each offense or not more than five thousand dollars for the same set of transactions or occurrences. Each violation constitutes a separate offense. If it is determined that the required bond must be increased, the administrative law judge shall state in writing the reasons for the increase and immediately serve it upon the mortgage broker and the department. The mortgage broker shall provide the new bond within thirty days or the department shall revoke the license of the mortgage broker.

(D)    A person who violates a provision of this chapter is guilty of a misdemeanor and, upon conviction, must be fined not more than five hundred dollars or imprisoned not more than six months, or both.

(E)    Nothing in this chapter limits a statutory or common law right of a person to bring an action in a court for an act or the right of the State to punish a person for a violation of a law.

(F)    The administrator of the department may suspend the right of an individual to engage in mortgage broker activity after finding that an originator or other employee of a licensed mortgage broker has failed to comply with a provision of this chapter. After an action by the administrator pursuant to this section, the originator or other employee of a licensed mortgage broker may request a contested case hearing before the Administrative Law Court."

Appeals

SECTION    14.    Section 40-58-90 of the 1976 Code, as last amended by Act 7 of 2004, is further amended to read:

"Section 40-58-90.    All appeals are to be made pursuant to the Administrative Procedures Act and the rules governing practice before the Administrative Law Court."

Enforcement

SECTION    15.    Section 40-68-160 of the 1976 Code is amended to read:

"Section 40-68-160.    (A)    For the purposes of this section, 'conviction' includes a plea of guilty or nolo contendere or a finding of guilt.

(B)    The department may take disciplinary action against a licensee, or a person engaging in professional employer services without a license, on any of the following grounds:

(1)    the conviction of a licensee or a controlling person of a licensee of bribery, fraud, or intentional or material misrepresentation in obtaining, attempting to obtain, or renewing a license;

(2)    the conviction of a licensee or a controlling person of a licensee of a crime that relates to the operation of a professional employer organization or the ability of the licensee or a controlling person of a licensee to operate a professional employer organization;

(3)    the conviction of a licensee or a controlling person of a licensee of a crime that relates to the classification, misclassification, or under-reporting of employees under the South Carolina Workers' Compensation Act;

(4)    the conviction of a licensee or a controlling person of a licensee of a crime that relates to the establishment or maintenance of a self-insurance program, whether health insurance, workers' compensation insurance, or other insurance;

(5)    the conviction of a licensee or a controlling person of a licensee of a crime that relates to fraud, deceit, or misconduct in the operation of a professional employer organization;

(6)    engaging in professional employer services without a license;

(7)    transferring or attempting to transfer a license issued pursuant to this chapter;

(8)    violating this chapter or an order or regulation issued by the department pursuant to this chapter;

(9)    failing to notify the department, in writing, of the civil judgment or felony conviction of a controlling person not later than the thirtieth day after the date on which the judgment or conviction is entered;

(10)    failing to cooperate with an investigation, examination, or audit of the licensee's records conducted by the licensee's insurance company or its designee, as provided by the insurance contract or as authorized by law by the South Carolina Department of Insurance;

(11)    failing to notify the department and the South Carolina Department of Insurance not later than the thirtieth day after the effective date of a change in ownership, principal business address, or the address of accounts and records;

(12)    failing to correct a tax filing or payment deficiencies within a reasonable time as determined by the department;

(13)    refusing, after reasonable notice, to meet reasonable health and safety requirements within the licensee's control and made known to the licensee by a federal or state agency;

(14)    failing to correct a delinquency in the payment of the licensee's insurance premiums within a reasonable time;

(15)    failing to correct a delinquency in the payment of an employee benefit plan premiums or contributions within a reasonable time;

(16)    knowingly or without sufficient inquiry, maintaining, sponsoring, offering, endorsing, or otherwise proffering self-insured, self-funded, or other employee benefit plans that are not licensed by the Department of Insurance;

(17)    knowingly making a material misrepresentation to an insurance company, to the department, or other governmental agency;

(18)    adverse final action by a state or federal regulatory agency for violations within the scope or control of the licensee;

(19)    failure to inform the department in writing within thirty days of an adverse final action by a state or federal regulatory agency; or

(20)    in case of a professional employer organization or group that has qualified for licensing pursuant to Section 40-68-55, the failure to notify the department within thirty days of any change in the status of its certification with the independent and qualified assurance organization.

(C)    Upon finding that a licensee has violated one or more provisions of this section, the department may:

(1)    deny an application for a license;

(2)    revoke, restrict, suspend, or refuse to renew a license;

(3)    impose an administrative penalty in an amount not less than one thousand dollars for each violation, but not more than fifty thousand dollars;

(4)    issue a reprimand;

(5)    issue a cease and desist order; or

(6)    place the licensee on probation for a period and subject to conditions and restrictions that the department specifies.

(D)    On revocation, or suspension of a license, the licensee immediately shall return the license to the department and may not:

(1)    solicit any new clients; or

(2)    enter into or execute any additional contracts for professional employer services.

(E)    Disciplinary action, a denial of an application for a new or renewal license, a revocation or suspension of a license, or a determination that a controlling person is unqualified may occur subject to the Administrative Procedures Act, with notice to, and an opportunity for a hearing by, the affected applicant, licensee, or controlling person. All contested hearings pursuant to this section are before the Administrative Law Court.

(F)    If a license is revoked or renewal is denied, the affected licensee may request a reinstatement hearing after a minimum of one year. The department may reinstate or renew the license only if the cause of the nonrenewal or revocation has been corrected.

(G)    A licensee who is found to be engaged in unlawful conduct may be assessed the reasonable costs necessary to the investigation, disciplinary proceedings, court proceedings, or other actions to enforce the provisions of this chapter."

Enforcement

SECTION    16.    Section 44-79-80(8) and (9) of the 1976 Code is amended to read:

"(8)    The administrator may file a request for a contested case hearing with the Administrative Law Court to obtain a cease and desist order or an order revoking, suspending, or vacating the certificate of authority of a center, if the department determines that the center has violated or failed to comply with any provision of this chapter or regulation promulgated under the authority of this chapter or if the department shows that:

(a)    a document or declaration required by subsection (4), items (a) through (g) were false or misleading; or

(b)    by clear and convincing evidence the center or its agents, officers, or employees have engaged in false, fraudulent, or deceptive conduct in its dealings with customers.

(9)    Instead of revocation, suspension, or refusal to continue a certificate of authority of a center, the administrative law judge may assess an administrative penalty for a violation of subsection (4) or (8) of this section not to exceed five hundred dollars for each violation, not to exceed five thousand dollars for matters commenced in any calendar year. These penalties may be assessed in connection with orders to cease and desist."

Enforcement

SECTION    17.    Section 56-28-110 of the 1976 Code is amended to read:

"Section 56-28-110.    Each subsequent purchaser must be notified by the seller of the fact that the vehicle was required to be repurchased pursuant to the terms of this chapter or another provision of law relating to motor vehicle warranties. If a seller fails properly to notify a purchaser of the requirements of this section, the department may impose an administrative penalty up to a maximum of five hundred dollars for each vehicle. A seller aggrieved by the action of the department may seek review by filing a request for a contested case hearing with the Administrative Law Court."

Contested case hearing

SECTION    18.    Section 59-102-70 of the 1976 Code, as added by Act 300 of 2004, is amended to read:

"Section 59-102-70.    (A)    The Department of Consumer Affairs may refuse to renew a registration for conduct that would have justified denial of registration pursuant to Section 59-102-60(B).

(B)    A person aggrieved by an action taken by the department pursuant to this subsection or pursuant to Section 59-102-60(B) may request review by filing a request for a contested case hearing with the Administrative Law Court.

(C)    The Department of Consumer Affairs may file a request for a contested case hearing with the Administrative Law Court for an order revoking or suspending the registration of an athlete agent for cause or for a violation of a provision of this chapter."

Contested case hearing

SECTION    19.    Section 59-102-170 of the 1976 Code, as added by Act 300 of 2004, is amended to read:

"Section 59-102-170.    Upon a finding that an athlete agent has violated a provision of this chapter, as determined from admissions of the athlete agent freely and voluntarily made or as the result of a contested case hearing, the administrative law judge may assess a fine against an athlete agent not to exceed one hundred thousand dollars for a violation of this chapter."

Contested case hearing

SECTION    20.    Section 37-11-100 of the 1976 Code is amended to read:

"Section 37-11-100.    The department may file a request for a contested case hearing with the Administrative Law Court to suspend or revoke a license issued pursuant to this chapter or assess a monetary penalty for violation of a provision of this chapter or a regulation promulgated pursuant to this chapter."

Definitions

SECTION    21.    Section 37-6-402(1) of the 1976 Code is amended to read:

"(1)    'Contested case' means a proceeding including, but not restricted to, a proceeding initiated pursuant to the provisions on administrative enforcement orders as provided in Section 37-6-108(A) and licensing matters in which the legal rights, duties, or privileges of a party are required by law to be determined after an opportunity for hearing."

Division of Motor Vehicle Hearings created

SECTION    22.    Section 1-23-660 of the 1976 Code is amended to read:

"Section 1-23-660.    There is created within the Administrative Law Court the Division of Motor Vehicle Hearings. The chief judge of the Administrative Law Court shall serve as the director of the Division of Motor Vehicle Hearings. The duties, functions, and responsibilities of all hearing officers and associated staff of the Department of Motor Vehicles are devolved upon the Administrative Law Court effective January 1, 2006. The hearing officers and staff positions, together with the appropriations relating to these positions, are transferred to the Division of Motor Vehicle Hearings of the Administrative Law Court on January 1, 2006. The hearing officers and staff shall be appointed, hired, contracted, and supervised by the chief judge of the court and shall continue to exercise their present Department of Motor Vehicle functions, duties, and responsibilities under the auspices of the Administrative Law Court as directed by the chief judge and shall perform such other functions and duties as the chief judge of the court prescribes. All employees of the division shall serve at the will of the chief judge. The chief judge is solely responsible for the administration of the division, the assignment of cases, and the administrative duties and responsibilities of the hearing officers and staff. Notwithstanding the foregoing, and in addition to the assistant provided for in Section 1-23-580(B), the Administrative Law Court must hire and supervise a law clerk or other assistant solely to assist the judges who hear Department of Motor Vehicle Hearing appeals with the administration of those appeals. The law clerk or other assistant must be selected by a majority of the judges who hear Department of Motor Vehicle Hearing appeals. The position must be funded from the appropriations to hear cases from the Department of Motor Vehicles and must be filled before the support staff of the division shall assume their functions and duties with the court.

The Budget and Control Board shall assist with all necessary actions to be taken to accomplish this transfer in consultation with the agency head of the transferring and receiving agencies.

Notwithstanding another provision of law, the hearing officers shall conduct hearings in accordance with Chapter 23 of Title 1, the Administrative Procedures Act, and the rules of procedure for the Administrative Law Court, at suitable locations as determined by the chief judge. The Department of Motor Vehicles shall continue to provide the existing locations within their facilities for such hearings as prescribed by the chief judge. The hearing officers are bound by the Code of Judicial Conduct, as contained in Rule 501 of the South Carolina Appellate Court Rules. Appeals from decisions of the hearing officers must be taken to the Administrative Law Court pursuant to the court's appellate rules of procedure. The chief judge shall not hear any appeals from these decisions. Nonetheless, the chief judge is not disqualified from, and remains responsible for, adjudicating cases under Section 1-23-600."

Filing fee

SECTION    23.    Section 56-5-2952 of the 1976 Code, as last amended by Act 61 of 2003, is further amended to read:

"Section 56-5-2952.    The filing fee to request an administrative hearing before the Division of Motor Vehicle Hearings of the Administrative Law Court is one hundred fifty dollars, or as otherwise prescribed by the rules of procedure for the Administrative Law Court. Funds generated from the collection of this fee must be retained by the Administrative Law Court."

Repeal

SECTION    24.    Sections 37-6-415 and 37-11-110 of the 1976 Code are repealed.

Savings clause

SECTION    25.    The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release, or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision shall so expressly provide. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.

Severability clause

SECTION    26.    If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.

Time effective

SECTION    27.    This act takes effect on July 1, 2005, and applies to all licensing and administrative hearings involving the South Carolina Department of Consumer Affairs.

Ratified the 2nd day of June, 2005.

Approved the 7th day of June, 2005.

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This web page was last updated on Friday, December 4, 2009 at 3:26 P.M.