Popular Legislative Themes Regarding Enforcement Topics:

Child Support Non-Payment and Student Loan Default

Generally, present law in most states authorizes many boards, commissions, and agencies that issue professional, occupation, and business licenses to suspend or revoke a license based on the licensee’s non-payment of child support and/or the licensee’s student loan default. Bills of this nature aim to eliminate the license suspensions for non-payment of child support and student loan default to keep the parent or the graduate working in their respective field. Many of these bills provide for the reinstatement of licenses for otherwise qualified applicants whose licenses were suspended, denied, or revoked based solely on defaulting on a student loan payment or for failure to meet child support payments. NASBA has seen significantly more Student Loan Default bills filed than the Non-Payment of Child Support bills filed in the past several years.

“Fresh Start” Acts: Criminal Conviction and Licensing Determinations

Generally, present law in most states authorizes some boards, commissions, and agencies that issue professional, occupational, and business licenses (licensing authorities) to deny, suspend, revoke, or refuse to renew a license based on the applicant or licensee being convicted of a criminal offense, usually a felony or a misdemeanor crime of “moral turpitude.”

Subject to certain exceptions, Fresh Start Acts, or bills of similar content, generally prohibit licensing authorities from denying an application for a license, certificate, or registration (a license), or refusing to renew a license solely or in part due to a prior criminal conviction that does not directly relate to the applicable occupation, profession, business, or trade.

These types of bills aim to create a uniform process that all licensing authorities must follow before denying or refusing to renew a license based on the applicant or licensee being convicted of a criminal offense. The process typically involves notice and an opportunity for a hearing before the licensing authority prior to the issuance of the denial or refusal. Many of these bills contain factors that a licensing authority must consider when deciding whether to deny or refuse to renew a license based on a criminal conviction. Some even include clauses that if the prior conviction was for a Class A, B, or C felony, or any offense for which the offender is required to register as a sex offender or as an animal abuser, there will be a rebuttable presumption that the conviction relates to the applicant’s or licensee’s fitness for the applicable occupation, profession, business, or trade.

Some of these types of bills take things a step further by providing a process by which a prospective applicant who has a past criminal conviction may request written notice from a licensing authority in order to find out whether the person is disqualified from licensure based on the person’s criminal history.

Marijuana

As marijuana restrictions become lessened among the states, some jurisdictions are providing for limitations on disciplinary actions from state business, occupation, or professional licensing boards and bureaus in regard to the personal possession and use of marijuana. Many bills require that licensing boards adjust their regulations for licensees or applicants who are qualifying individuals for medical marijuana. This is certainly a legislative theme to watch!

Recent and Proposed Statute Changes

(The bills below represent a sample of bills filed in the 2021-2022 legislative year with enforcement related topics. A brief summary of their content is included. This is not, however, an all-inclusive list of enforcement related bills filed during this time. Bills listed below have passed and were made into law unless otherwise indicated).

AK HB 8 Proposed February 2021 – FAILED

The bill would have allowed licensing boards to consider certain crimes as grounds for disciplining or sanctioning a licensed individual.

AZ HB 2067 Effective September 29, 2021

The bill creates a certificate of a second chance for individuals convicted of certain misdemeanors who have been working without incident for two years. Unless specifically excluded by this section, releases the person from all barriers and disabilities in obtaining an occupational license issued under Title 32 that resulted from the conviction if the person is otherwise qualified.

AZ HB 2319 Effective September 29, 2021

The bill prohibits licensing boards from denying an application based on a drug conviction.

AZ HB 2570 Effective September 29, 2021

This bill prohibits a state agency, municipality, or county from revoking any license that is required to operate a business for not complying with a state of emergency order that is issued.

AZ HB 2787 Effective September 29, 2021

This bill clarifies the factors used to determine whether a person’s criminal record disqualifies the person from obtaining an occupational license, permit, certificate, or other state recognition.

FL HB 87 Proposed September 2021 — FAILED

This bill would have revised the period when conviction, or any other adjudication, for crime may not be grounds for denial of licensure in specified professions. It also would have removed the provision requiring good moral character for licensure in such professions. The bill required applicable board to approve certain educational program credits offered to inmates in certain institutions or facilities for purposes of satisfying training requirements for licensure in specified professions.

ID H 612 Effective July 1, 2022

This bill grants a licensing authority the authority to grant a request for the expungement of disciplinary action previously imposed on a person’s licensure, whether formal, informal, corrective action, or action in lieu of discipline, as authorized by the new section and in compliance with any rules adopted by a licensing authority.

ID H 629 Effective July 1, 2022

Amendments to Idaho Administrative Code regarding hearing officers. This bill adds a definition for “chief administrative hearing officer” and “hearing officer.” It deletes language referring to the attorney general being able to promulgate rules regarding the qualifications for persons seeking to act as a hearing officer. This bill also makes amendments to Contested Cases and amendments to presiding officer disqualification. It adds new sections pertaining to chief administrative hearing officer appointment, qualifications, removal, and salary; duties and prohibited conduct of the chief administrative hearing officer; cooperation of agencies; cost estimates, conduct of contested case proceedings and contested cases procedures.

IL HB 14 Effective January 1, 2022

This bill provides that, if the Department of Financial and Professional Regulation refuses to issue a license or certificate or grant registration to an applicant based upon a criminal conviction or convictions, the department shall include in its notification to the applicant an explanation of how the conviction directly relates to and would prevent the person from effectively engaging in the position for which a license, registration, or certificate is sought.

LA SB 67 Effective August 1, 2022

This bill provides for the reorganization and modernization of the Administrative Procedure Act. This bill extends the maximum time for an agency to hold a public hearing to no later than 45 days (modified from 40) after the notice of the intended action is published in the Louisiana Register. It also extends the deadline for an agency to publish a public notice that a report summarizing public comments and the agency responses have been delivered to the appropriate standing committee to five days (modified from one) from submission of the report to the appropriate standing committee. The bill requires the Office of the State Register to publish all executive orders issued by the governor.

MS HB 619 Proposed January 2022 – FAILED

This bill would have amended the Fresh Start Act to clarify the factors used to determine whether a person with a criminal record will be disqualified from receiving a license. The bill also provided that if a person’s criminal record disqualifies a person from receiving a license and the licensing authority determines that the criminal record is directly related to the duties and responsibilities of the licensed occupation, the licensing authority must document its findings in writing sufficient for a reviewing court.

NJ S 942 Effective August 11, 2021

This bill requires certain standards for professional and occupational boards considering applicants with criminal history records.

NM SB 2 Effective April 2021

This bill lists the criminal records that shall not be used, distributed, or disseminated in connection with an application for any public employment, license, or other authority.

OK SB 81 Proposed February 2021 – FAILED

The bill would have created the Oklahoma Accountancy Board Revolving Fund for implementing and enforcing the provisions of the Oklahoma Accountancy Act. The fund would receive all administrative penalties and fines from enforcement. The bill also would have given the Accountancy Board the authority to establish a student scholarship and grant program to assist eligible students who are qualified to take the certified public accountant or licensed public accountant examination.

RI HB 5599 Effective July 13, 2021

This bill removes “moral turpitude” language from revocation/suspension section, the Registration section; and the complaints/hearings section.

TX HB 757 Effective September 1, 2021

This bill provides that an offense for which the defendant received a dismissal and discharge under this article may not be used as grounds for denying issuance of a professional or occupational license to, or suspending or revoking the professional or occupational license of, an individual otherwise entitled to or qualified for the license.

VT H 289 Effective July 1, 2021

This bill makes various amendments to statutes governing professions and occupations regulated by the Office of Professional Regulation. Mentions apprenticeship programs and criminal background histories. Mentions legal powers and ALJ orders. Unprofessional Conduct section amended to include violations for deceiving, defrauding, or harming the public.

WA HB 1399 Effective January 1, 2022

This bill reduces barriers for individuals with previous criminal convictions who are applying for a professional licensure. The individual may submit a preliminary application to the licensure board detailing the individual’s personal qualifications for a determination as to whether the individual’s criminal conviction would disqualify the individual from obtaining the occupational or professional license.

WV HB 4634 Effective June 30, 2022

The bill establishes that an applicant seeking licensure in this state may not have ever had a license revoked or suspended in another state. The bill provides that an applicant seeking licensure in this state may not have any pending investigations or disciplinary proceedings in another state. The bill provides that the boards in every state where a person is licensed hold the applicant in good standing for licensure in this state. The bill provides for an appeal mechanism for a person to appeal any decision of a board relating to occupational licensure. The bill provides for state law preemption against any township, municipality, county, or other government to regulate occupational licensure.

Recent Rule Changes:

(The rule amendments below represent a sample of amendments filed in 2021-2022 with enforcement related topics. A brief summary of their content is included. This is not, however, an all-inclusive list of enforcement related amendments filed during this time. Amendments listed below have passed and were made into regulations unless otherwise indicated).

CO Entire Rule Review (Effective June 30, 2022)

Revisions adopted throughout the State Board of Accountancy’s rules pursuant to the rule review mandated by section 24-4-103.3, C.R.S. The regulations amend the definition of AICPA Ethics Examination to the new title of the course that is require for the ethics Exam. The changes update the AICPA Professional Standards referenced from May 2017 version to the June 2021 version. The amendments update the reference to the Governmental Auditing Standards from the December 2011 version to the July 2018 version. There has been an update to the Cost Accounting Standards Board reference from July 2012 version to October 2020 and an update to the FASAB Handbook of Accounting Standards reference from the June 2017 version to the June 2021 version.

The regulations amend Disclosure requirements of Licensee to board of certain items from 45 days to 30 (see now 1.9(E) and see 1.15 (previously 1.12 Firm Requirements Disclosures). It also adds for condition of reactivation/reinstatement that the licensee complete the specific AICPA ethics course.

Requirement to Report Discipline: now must notify the Board within 20 days now instead of 45. Rules reviewed by CO Atty Gen. No Constitutional or Legal Deficiency determined on 5/24/22.

FL Amendments to:

61H1-30.010 Active License

61H1-30.020 Delinquent License

61H1-30.030 Null and Void License

61H1-30.040 Inactive License

61H1-30.050 License Relinquishment (Effective April 26, 2022)

The Board proposes new rules to clarify the active license, delinquent license, null and void license, inactive license, and license relinquishment. Board added text for new rules. Language regarding Active License requirements which includes licensee fee and CPE. Delinquent License: failure to renew details added with date deadlines. Reactivation requirements mentioned. Definition for Null and Void license added with reinstatement requirements including fees and CPE (this includes 120 hours for reinstatement of null and void license to delinquent consisting of 30 hours in accounting and auditing, 8 hours in board approved ethics, and no more than 30 in behavioral subjects and 120 hours for reactivation from delinquent status to current active status consisting of 30 hours in accounting and auditing, 8 hours in board approved ethics, and no more than 30 in behavioral subjects. Offers option in lieu of reinstatement to apply for licensure by endorsement or by exam. New section regarding Inactive License specifying that the licensure status must be made by electing the change with corresponding fees and forms. CPE is suspending during the inactive period. Gives requirements for reactivating to active status. New section regarding License Relinquishment which specifies a required form and allows board to use relinquishment as a form of discipline.

FL Amendments to:

61H1-36.005 (Proposed October 2021 – PENDING)

61H1-36.004 (Proposed October 2021 – PENDING)

Development – Disciplinary Guidelines, Range Of Penalties, Aggravating And Mitigating Circumstances, Citations – The Board proposes the rule development to conduct a comprehensive review and to determine if there are any needed updates, changes, or corrections to the rule language. Changes disciplinary fine amounts depending on the number of hours lacking for CPE compliance and other violations.

IA Amendments to:

Chapter 2 Organization and Administration

Chapter 3 Certification of CPAs

Chapter 4 Licensure of LPAs

Chapter 6 Attest and Compilation Services

Chapter 9 Reciprocity and Substantial Equivalency

 Chapter 10 Continuing Education and

Chapter 18 Licensees’ Duty to Report

Iowa Administrative Code. (Effective February 16, 2022)

Amendments to the accrediting institutions recognized by the board. Amendments to CPE Requirements for one not applying within 3 years of passing the Exam: adds a minimum of 4 hours of Ethics. Amendments to the experience section to include attest nuances. Adds South African chartered accountant to the substantial equivalency section. The proposed amendments to Chapters 2 and 10 will bring the rules into compliance with 2020 Iowa Acts, House File 2389. Other amendments are in partial compliance with Iowa Code section 17A.7(2), which states that beginning July 1, 2012, over each five-year period, an agency shall conduct an ongoing and comprehensive review of all of the agency’s rules.

The goal of the review is to identify and eliminate all rules that are outdated, redundant, inconsistent, or incompatible with statute or the agency’s rules or the rules of other agencies. Under who may perform attest services: Amends experience rule to require attest instead of audit experience. Eliminated student loan debt from barring issuance of a license/disciplinary measures.

NM 16.60.5 NMAC (Effective December 31, 2021)

16.60.5.11 Rules of Conduct Section B (7) is amended. A reportable event now includes a conviction or plea of no contest to which the licensee is a defendant if the crime is listed in section 16.60.5.14 of the Rules. 16.60.5.14 is added as Criminal Convictions and includes a list of convictions of that may disqualify an applicant from receiving or retaining a license issued by the board is amended. Also adds stipulations for consideration criminal convictions in licensing and disciplinary decisions. Refers to definition in broad Uniform Licensing Statute: Subsection E of Section 61-1-36 NMSA 1978.

A board shall not exclude from licensure a person who is otherwise qualified on the sole basis that the person has been previously arrested for or convicted of a crime unless the person has a disqualifying criminal conviction.

By December 31, 2021, each board shall promulgate and post on the board’s website rules relating to licensing requirements to list the specific criminal convictions that could disqualify an applicant from receiving a license based on a previous felony conviction. Rules relating to licensing requirements promulgated by a board shall not use the terms “moral turpitude” or “good character.” A board shall only list disqualifying criminal convictions.

In an administrative hearing or agency appeal, a board shall carry the burden of proof on the question of whether the exclusion from occupational or professional licensure is based upon a disqualifying criminal conviction.

No later than October 31 of each year, while ensuring the confidentiality of individual applicants, a board shall make available to the public an annual report for the prior fiscal year containing the following information:(1) the number of applicants for licensure and, of that number, the number granted a license; (2) the number of applicants for licensure or license renewal with a potential disqualifying criminal conviction who received notice of potential disqualification; (3) the number of applicants for licensure or license renewal with a potential disqualifying criminal conviction who provided a written justification with evidence of mitigation or rehabilitation; and (4) the number of applicants for licensure or license renewal with a potential disqualifying criminal conviction who were granted a license, denied a license for any reason or denied a license because of the conviction.

As used in this section, “disqualifying criminal conviction” means a conviction for a crime that is job-related for the position in question and consistent with business necessity.”

RI Amendments to:

1.7 Professional Conduct

1.7.2 Professional Obligations

1.8 Continuing Professional Education (“CPE”)

1.8.1 CPE Rules per R.I. Gen. Laws § 5­3.1­4(f)(4) Authority

1.9 Peer Review Standards, 1.9.1 Peer Review Program

1.9.1 Peer Review Program

1.9.2 Peer Review Oversight Committee

1.9.3 Mergers, Dissolutions and Separations

1.9.4 Extensions

1.9.6 Enforcement

1.9.7 Reporting (Effective April 4, 2022)

The purpose of this regulation is to implement the Accountancy Act. These amendments proposed by the Rhode Island Board of Accountancy (“Board”) make the following substantive changes: § 1.3(E) was added to codify a licensee’s inherent duty to update its contact information and timely respond to correspondence from the Board. § 1.7.2(B) Amends the self-reporting obligations of licensees to include reporting disciplinary action by a “relevant industry oversight body” such as the Public Company Accounting Oversight Board and American Institute of Public Accountants within sixty days of a final adverse action. § 1.8.1(B)(3) Codify standards to allow CPAs to earn continuing professional education (CPE) credit for instructors teaching of online CPEs. § 1.8.1(B)(5)(C)((5)) Changes the term “correspondence” self-study to the more modern “remotely-delivered.”

§ 1.8.1(B)(6)(b) Provides for remotely delivered college courses to qualify for CPE if certain standards are met.

§ 1.9 – Simplifies the Peer Review process to comport with current practice of the board, specifically to recognize that: (1) upon renewal, firms must attest and provide proof of compliance with RIGL 5-3.1-10; (2) remove references to “peer review oversight committee” and replace with the full board for peer review oversight; (3) require firms to notify the board if the peer reviewer dropped or terminated the relationship and its course of action to ensure compliance; and (4) relocate the exemptions paragraph from § 1.9.5 to § 1.9.1(E) so it is clear from the first subheading whether or not a firm is subject to the peer review requirements.

These amendments help to modernize and clarify the CPE rules to ease compliance burdens for licensees. With the expansion of learning options, the Rhode Island regulatory environment can better support the goal of continued CPA competence. More modern and streamlined continuing education requirements will help with retaining active CPA registrations and attracting new CPAs to choose to register in Rhode Island. These amendments are aimed to provide broader societal benefits by fostering public trust in this profession that provides critical financial services to Rhode Island businesses and individuals and incentivizing continued renewals and registrations of CPAs available to provide these services.

TX 22 TAC §511.96 (Effective June 2, 2021)

Appeal from Denial of Request: The amendment eliminates the requirement that the board provide a response to the denial of an appeal within 30 days. There may be extenuating circumstances that requires greater than 30 days to evaluate the appeal.

WA WAC 4-30-028 (Effective March 3, 2022)

Proceedings Before the board: The intent of this rule change is to clarify how the board enforces the sanctions contained in board orders. The Board of Accountancy proposes amending WAC 4-30-028 to reformat the title, add an RCW reference, remove an outdated section, and add a board decision to which this rule applies so that the process is more efficient.

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