H*4627 Session 111 (1995-1996)
H*4627(Rat #0523, Act #0453 of 1996) General Bill, By Cato, Boan, H. Brown,
J. Brown, Lanford, Tripp, Vaughn and D.A. Wright
Similar(S 1202)
A Bill 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.-amended title
02/15/96 House Introduced and read first time HJ-8
02/15/96 House Referred to Committee on Labor, Commerce and
Industry HJ-8
03/27/96 House Committee report: Favorable with amendment Labor,
Commerce and Industry HJ-4
03/28/96 House Amended HJ-30
03/28/96 House Read second time HJ-64
03/28/96 House Unanimous consent for third reading on next
legislative day HJ-64
03/29/96 House Read third time and sent to Senate HJ-2
04/02/96 Senate Introduced and read first time SJ-15
04/02/96 Senate Referred to Committee on Labor, Commerce and
Industry SJ-15
04/16/96 Senate Committee report: Favorable with amendment Labor,
Commerce and Industry SJ-19
05/15/96 Senate Amended SJ-26
05/15/96 Senate Read second time SJ-26
05/16/96 Senate Read third time and returned to House with
amendments SJ-35
05/23/96 House Debate adjourned on amendments HJ-60
05/23/96 House Debate adjourned on Senate amendments until
Tuesday, May 28, 1996 HJ-90
05/28/96 House Senate amendment amended HJ-51
05/28/96 House Returned to Senate with amendments HJ-51
05/29/96 Senate Non-concurrence in House amendment SJ-53
05/29/96 House House recedes from amendments HJ-124
05/29/96 Senate Ordered enrolled for ratification SJ-49
06/13/96 Ratified R 523
06/20/96 Became law without Governor's signature
06/20/96 Effective date 06/20/96
07/02/96 Copies available
07/02/96 Act No. 453
(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.
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