Popular Legislative Themes Regarding Enforcement Topics:
“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.”
Child Support Non-Payment and Student Loan Default
Generally, present law in most states authorizes many boards, commissions and agencies that issue professional, occupational 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 are now being introduced 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.
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 2019 – 2020 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.
AZ SB 1507 (failed)
Amendments to review of administrative decision, notice of appeal, and process for court review.
AZ SB 1131
Amendments to relinquishment of a license. Amendments to revocation of a license.
CA AB 2138
Amends disciplinary and licensing provisions related to licensee’s criminal or substance abuse history; limits restrictions board can place on licensee.
CA AB 1616 (failed, but likely to be introduced again)
Department of Consumer Affairs: boards: expunged convictions. Existing law establishes the Department of Consumer Affairs, which is composed of various boards, and authorizes a board to suspend or revoke a license on the ground that the licensee has been convicted of a crime substantially related to the qualifications, functions, or duties of the business or profession for which the license was issued. This bill would require a board within the department that has posted on its internet website that a person’s license was revoked because the person was convicted of a crime to, within six months of receiving the expungement order for the underlying offense from the person, post notification of the expungement order and the date thereof on the board’s internet website if the person applies for licensure or is relicensed, or removes the initial posting on its internet website that the person’s license was revoked if the person is not currently licensed and does not reapply for licensure, as specified. The bill would require a person to pay a fee, to be determined by the department, to the board, for the cost of administering the bill’s provisions.
FL HB 115
Keep Our Graduates Working Act. Prohibits state authority from suspending or revoking person’s professional license, certificate, registration, or permit solely on basis of delinquency or default in payment of his or her student loan.
IA HSB 647 (failed)
Amendments procedure for denial of license due to criminal conviction.
IA HF 437 (withdrawn)
Amendments to licensing sanctions against individuals who default or are delinquent on student loan debt or on a related service obligation.
IA HF 541 (failed)
Amendments relating to complaint and investigation process for regulatory boards.
IA SSB 3122
Amendments to licensure of persons licensed in other jurisdictions. Disqualifications for criminal convictions. Waiver of license application fees. Amendments to discipline.
KS SB 220 (failed)
Amendments regarding felony convictions and what may bar licensure.
LA HB 423
Repeals the ability of a professional board or commission to revoke an occupational or professional license for failure to pay student loans.
MO HB 1307 (failed)
Eliminates license suspensions for nonpayment of child support.
MO HB 2141 (failed)
Fresh Start Act. Notwithstanding any other provision of law, no person shall be disqualified from pursuing, practicing, or engaging in any occupation for which a license is required solely or in part because of a prior conviction of a crime, unless the criminal conviction directly relates to the duties and responsibilities for the licensed occupation.
MO SB 560 (failed)
Current law requires any state agency or board established for the regulation of occupations and professions to issue a temporary courtesy license to a nonresident spouse of an active duty member of the military who is transferred to Missouri in the course of the member’s military duty, so that such spouse may lawfully practice his or her occupation or profession in the state.
NV AB 319
Authorizing a person to petition a professional or occupational licensing board for a determination of whether the person’s criminal history will disqualify him or her from obtaining a license; requiring a professional or occupational licensing board to implement a process for such a petition; establishing certain requirements for such process; requiring a professional or occupational licensing board to make a quarterly report to the Legislative Counsel Bureau with certain information; and providing other matters properly relating thereto.
NY AB 1184 (pending)
Mandatory reporting of certain convictions, professional misconduct and/or adverse employment actions; requires all licensees to report to education department any conviction of crime within 30 days; authorizes commissioner to issue a summary suspension order under certain circumstances. Pertains only to educators at this point (but could spread to Accountancy or Reg Boards during session).
PA HB 1566 (failed)
An act empowering the General Counsel or his designee to issue subpoenas for certain licensing board activities; providing for hearing examiners in the Bureau of Professional and Occupational Affairs; providing additional powers to the Commissioner of Professional and Occupational Affairs; and further providing for civil penalties and license suspension, further providing for civil penalties.
PA SB 637
Criminal records in consideration for licensure.
Recent Rule Changes:
The rule amendments below represent a sample of amendments filed in 2019 – 2020 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.
AK Rule 10.2 Amendment
Act 990 of 2019 required the Board to update this rule to comply with the new requirements surrounding the consideration of the criminal history of licensees and applicants.
AK Rule 21
Prelicensure – Criminal Background – The Board is promulgating this new rule because of Act 990 of 2019. This rule lays out the process by which an applicant with a criminal background may petition our Board for determination of whether the applicant’s criminal background will disqualify the applicant and whether or not a waiver could be obtained.
CA: amend sections 98, 99, 99.1, and 99.2 of title 16 of the CCR (still Pending with Office of Administrative Law)
Proposes to amend sections 98, 99, 99.1, and 99.2 of title 16 of the CCR relating to the denial, suspension, and revocation of a certificate, permit or license issued by the CBA and the assessment of administrative penalties for violations of the Accountancy Act. Existing law, BPC 5112, authorizes the CBA to deny a license based on the grounds described in Section 5100. Existing law, BPC 5100, authorizes the CBA to revoke, suspend, censure, or refuse to renew a license issued by the CBA. Existing law, BPC section 5116, requires the CBA to establish criteria for assessing administrative penalties for violations of the Accountancy Act. This proposal would revise CBA regulations to update the disciplinary guidelines that establish criteria for assessing administrative penalties. GC section 11425.50(e) specifies that a penalty may not be based on a guideline, criterion, bulletin, manual, instruction, order, standard of general application or other rule unless it has been adopted as a regulation.
Current CBA regulation, CCR section 98, incorporates by reference the CBA’s “A Manual of Disciplinary Guidelines and Model Disciplinary Orders, 9th edition, 2013” (Disciplinary Guidelines). The CBA is proposing to amend CCR section 98 to update its Disciplinary Guidelines. As a result of updated statutory provisions in Assembly Bill No. 2138 (Chiu and Low, Chapter 995, Statutes of 2018) (AB 2318), the CBA is proposing to amend CCR sections 99 and 99.1, and adopt CCR section 99.2.
On September 30, 2018, AB 2138 was enacted, amending provisions of the BPC relating to DCA boards’ authority to deny, revoke, or suspend a license, effective July 1, 2020. AB 2138 requires boards to amend existing criteria regarding crimes substantially related to the regulated profession and rehabilitation criteria. Currently, the CBA may deny an application for licensure based on a conviction of a crime or act that is substantially related to the qualifications, functions or duties of a certified public accountant or public accountant, with certain limitations, and suspend or revoke a license on the basis that the licensee was convicted of a substantially related crime. CCR section 99 of the CBA’s regulations includes criteria relating to the identification of substantially related crimes, and CCR section 99.1 establishes criteria to evaluate a person’s rehabilitation when considering the denial, suspension, or revocation of a license. In addition, AB 2138 authorizes certain specified boards, including the CBA, to deny a license if the applicant was convicted of a financial crime currently classified as a felony that is directly and adversely related to the fiduciary qualifications, functions, or duties of the regulated profession. The CBA is proposing the addition of CCR section 99.2 to address the criteria for such financial crimes.
KY 201 KAR 1: 300; related to KRS 325.240: Adopting Code of Conduct
Kentucky State Board of Accountancy proposes adopting and incorporating by reference the AICPA Code of Professional Conduct and eliminates its previous rules on professional conduct.
KY: 201 KAR 1:310
Proposed changes to Expungement of minor violation; changes to procedure for CPAs to expunge a former violation from their record.
NV: Chapter 628 of NAC; NAC 628.850 to 628.975; 628.855 to 628.875
Amendments to procedures for approval or denial of a license. Includes process for criminal convictions.
OK: Felony Convictions Rules Subchapter 23. Registration 10:15-23-1. [AMENDED] Subchapter 25. Permits 10:15-25-3. [AMENDED] Subchapter 27. Fees 10:15-27-16. [NEW] Subchapter 37. Enforcement Procedures 10:15-37-11. [AMENDED].
Amendments to Felony Convictions. Provides applicability of section to those renewing certificates. Adds requirement for Board to maintain a list of offenses disqualifying an individual. Adds a process and timeline for determination. The proposed revision to 10:15-18-1(b) is to take out the “good moral character” requirement for exam applicants in keeping with the removal of the same requirement for qualification applicants under House Bill 1373 (“HB 1373”), which became effective November 1, 2019. The addition of 10:15-27-16 allows the Board to charge a $95.00 fee, as authorized under HB 1373, for an “initial determination of eligibility request” for those applicants with criminal history. The proposed revisions to 10:15-37-11 are to set out the framework to effectuate the requirements under HB 1373. Under the new law, the Board must maintain and make available to the public a list of criminal offenses that would disqualify an individual from holding a license or certificate.
OR: Various changes to sections 801-001, 801-005, 801-010, 801-020, 801-030, 801-030, and 801-050
Licensees must notify the Board within 10 days of initiation of any criminal investigation against the licensee or resolution of any criminal investigation against the licensee.
Firms must notify the Board within 45 days of resolution of any civil action against the Firm that relates to professional services, business operations or practices of the registered firm in Oregon; resolution of any civil action against any Oregon licensee affiliated with the firm that relates to professional services, business operations or practices of the registered firm in Oregon; initiation of any regulatory action against the firm; resolution of any regulatory action against the firm; initiation of any regulatory action against any Oregon licensee affiliated with the firm; resolution of any regulatory action against any Oregon licensee affiliated with the firm; any inquiry into an Oregon firms conduct through a professional organization; or resolution of any inquiry of an Oregon firm from a professional organization. Firm must notify the Board within 10 days of initiation of any criminal investigation against the Firm; resolution of any criminal investigation against the Firm; or initiation of any criminal investigation against any of the following individuals affiliated with the firm: Oregon licensee, Oregon Partner, Oregon Owner.
TX: 22 TAC 519.40
Occasionally, licensees fail to respond to the public and/or fail to the respond to the Board. When this occurs, the Board will seek a default judgment against the licensee. In those cases where this occurs regulatory expenses can be minimized by having the hearing conducted by the executive director.
TX: 22 TAC 519.7
The proposed revision is to add the misdemeanor offense of evading arrest to the list of criminal offenses that could result in a disciplinary action by the Board against a licensee.
TX: 22 TAC 511.161
The amendment to §511.161 deletes the reference to good moral character to track the changes made to the Act effective September 1, 2019 and advises applicants that the Board will be reviewing applicants’ criminal history records in order to ensure that licensees possess the integrity necessary to provide accounting services to the public.
TX: 22 TAC 519.7
The amendment to §519.7 identifies the types of criminal offenses that could subject a licensee to disciplinary action and why they are necessary to protect the public.
TX: 22 TAC 525.3
Amendments concerning criminal background checks. The amendment to §525.3 clarifies the Board’s requirement for the fingerprints of applicants and licensees and the review of their criminal history records to assure the public’s protection.
UT: Criminal History License Determination
Enacted by HB 90 passed in 2019 General Session. New language: R156-1-310. Application for Division Determination Regarding Criminal Conviction. The application procedures for a Division determination pursuant to Section 58-1-310 are clarified and established as follows:
(1) An individual applying for a determination shall submit the Application for Criminal History Determination form made available on the Division’s website, containing a signed attestation and release.
(2) An individual shall submit a separate application for criminal history determination with processing fee ($95) for each occupational or professional license that the individual is interested in seeking.
(3) Pursuant to Subsection 58-1-310(2), the individual’s complete criminal conviction history shall include:
(a) criminal convictions, pleas of nolo contendere, and pleas of guilty or nolo contendere which are held in abeyance pending the successful completion of probation; and
(b) current restrictions from possession, purchase, transfer, or ownership of a firearm or ammunition.
(4) Pursuant to Subsection 58-1-310(2)(e), the individual shall provide any additional documentation that may be required by the Division to verify or evaluate the individual’s representations made in their application.
(5) A determination shall be based solely on the information contained in the individual’s application and supporting documents.
(6) An individual whose application has been denied as incomplete, or who has received an unfavorable determination that their criminal record would disqualify them from obtaining the license, may submit a request for agency review to the executive director within 30 days of the date of issuance of the denial or of the unfavorable determination.
UT: Enforcement Procedures. 10:15-37-11.
Amendment takes out the “good moral character” requirement for exam applicants in keeping with the removal of the same requirement for qualification under HB 1373 which became effective November 1, 2019
VA: Penalty Matrix
Released a new Enforcement Guideline and Penalty Matrix in May of 2020. This can be accessed on the Virginia Board of Accountancy website.
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