2007-2008 Bill 1238: Board of Accountancy - South Carolina Legislature Online

1 South Carolina General Assembly 2 117th Session, 2007-2008 3 4 S. 1238 5 6 STATUS INFORMATION 7 8 General Bill 9 Sponsors: Senator McConnell 10 Document Path: l:\council\bills\ggs\22059ab08.doc 11 12 Introduced in the Senate on March 27, 2008 13 Currently residing in the Senate Committee on Labor, Commerce and Industry 14 15 Summary: Board of Accountancy 16 17 18 HISTORY OF LEGISLATIVE ACTIONS 19 20 Date Body Action Description with journal page number 21 3/27/2008 Senate Introduced and read first time SJ-12 22 3/27/2008 Senate Referred to Committee on Labor, Commerce and Industry SJ-12 23 4/1/2008 Scrivener's error corrected 24 25 26 VERSIONS OF THIS BILL 27 28 3/27/2008 29 4/1/2008 30 1 2 3 4 5 6 7 8 9 A BILL 10 11 TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 12 1976, BY ADDING SECTION 40-2-12 SO AS TO PROVIDE 13 THAT THE BOARD OF ACCOUNTANCY SHALL HIRE AN 14 EXECUTIVE DIRECTOR TO PERFORM CERTAIN 15 FUNCTIONS AND AN INVESTIGATOR TO CONDUCT 16 INVESTIGATIONS, AND THE SECRETARY OF STATE 17 SHALL PROVIDE COUNSEL TO THE BOARD AND EMPLOY 18 OTHER COUNSEL AS IT CONSIDERS NECESSARY; BY 19 ADDING SECTION 40-2-14 SO AS TO PROVIDE THE 20 RESPONSIBILITIES OF THE OFFICE OF THE SECRETARY 21 OF STATE TO THE BOARD; BY ADDING SECTION 40-2-16 22 SO AS TO PROVIDE THE DISPOSITION OF CERTAIN 23 REVENUE RECEIVED BY THE SECRETARY OF STATE, 24 AND CERTAIN REQUIREMENTS FOR THE BUDGET; BY 25 ADDING SECTION 40-2-115 SO AS TO PROVIDE THE 26 BOARD’S JURISDICTION; BY ADDING SECTION 40-2-195 27 SO AS TO MAKE CERTAIN COMMUNICATIONS OF THE 28 BOARD PRIVILEGED; BY ADDING SECTION 40-2-205 SO 29 AS TO PROVIDE A VIOLATION CONSTITUTES A 30 MISDEMEANOR SUBJECT TO CERTAIN PENALTIES; BY 31 ADDING SECTION 40-2-515 SO AS TO PROVIDE A 32 DISCLAIMER FOR AN ACCOUNTING PRACTITIONER TO 33 USE WHEN ASSOCIATING HIS NAME WITH CERTAIN 34 FINANCIAL STATEMENTS COMPILED BY HIM; TO 35 AMEND SECTION 40-1-40, RELATING TO CERTAIN 36 BOARDS ADMINISTERED BY THE DEPARTMENT OF 37 LABOR, LICENSING AND REGULATION, SO AS TO 38 REMOVE THE BOARD OF ACCOUNTANCY FROM THE 39 LIST OF BOARDS ADMINISTERED BY THE DEPARTMENT; 40 TO AMEND SECTION 40-2-10, AS AMENDED, RELATING 41 TO THE SOUTH CAROLINA BOARD OF ACCOUNTANCY, 42 SO AS TO PROVIDE THAT THE BOARD IS CREATED

1 [1238] 1 1 UNDER THE OFFICE OF THE SECRETARY OF STATE, TO 2 DEVOLVE THE DUTIES, RESPONSIBILITIES, AND 3 FUNCTIONS OF THE EXISTING BOARD TO THE NEW 4 BOARD, AMONG OTHER THINGS; TO AMEND SECTION 5 40-2-20, AS AMENDED, RELATING TO CERTAIN 6 DEFINITIONS, SO AS TO REMOVE THE DEFINITION OF 7 “DEPARTMENT” AND PROVIDE A DEFINITION FOR 8 “SECRETARY”; TO AMEND SECTION 40-2-70, AS 9 AMENDED, RELATING TO POWERS AND DUTIES OF THE 10 BOARD, SO AS TO REMOVE LANGUAGE MAKING THE 11 BOARD’S POWERS CUMULATIVE TO GENERAL POWERS 12 AND DUTIES OF BOARDS DESCRIBED IN SECTION 13 40-1-70; TO AMEND SECTION 40-2-80, AS AMENDED, 14 RELATING TO INVESTIGATIONS OF COMPLAINTS 15 ALLEGING VIOLATIONS, SO AS TO SUBSTITUTE 16 “SECRETARY OF STATE” FOR “DEPARTMENT”, AND TO 17 PROVIDE DISCIPLINARY ACTIONS THE BOARD MAY 18 TAKE FOR A VIOLATION; TO AMEND SECTION 40-2-90, 19 RELATING TO HEARING PROCEDURES FOR A 20 VIOLATION, SO AS TO SUBSTITUTE “SECRETARY OF 21 STATE” FOR “DEPARTMENT”; TO AMEND SECTION 22 40-2-100, AS AMENDED, RELATING TO EQUITABLE 23 REMEDIES AVAILABLE FOR A VIOLATION; TO AMEND 24 SECTION 40-2-110, AS AMENDED, RELATING TO 25 REVOCATION, SUSPENSION, OR PROBATION OF A 26 LICENSE, SO AS TO MODIFY THE PENALTIES AVAILABLE 27 FOR A VIOLATION BY A LICENSEE; TO AMEND SECTION 28 40-2-170, AS AMENDED, RELATING TO THE COST OF 29 INVESTIGATING AND PROSECUTING AN ALLEGED 30 VIOLATION, SO AS TO PROVIDE FAILURE TO TIMELY 31 MAKE AN ORDERED PAYMENT WILL RESULT IN 32 COLLECTION OF RELATED COSTS IN ACCORDANCE 33 WITH SECTION 40-2-180 RATHER THAN SECTION 40-1-180; 34 TO AMEND SECTION 40-2-180, AS AMENDED, RELATING 35 TO UNPAID COSTS BECOMING JUDGMENT, SO AS TO 36 SUBSTITUTE “SECRETARY OF STATE” FOR 37 “DEPARTMENT”, AND TO REMOVE LANGUAGE 38 PROVIDING A COST OR FINE IMPOSED MUST BE PAID IN 39 ACCORDANCE WITH SECTION 40-1-180; TO AMEND 40 SECTION 40-2-210, AS AMENDED, RELATING TO 41 EQUITABLE REMEDIES AVAILABLE FOR A VIOLATION 42 OF THE LICENSING AND REGULATION REQUIREMENTS 43 OF THIS CHAPTER, SO AS TO REMOVE LANGUAGE

1 [1238] 2 1 REQUIRING A REMEDY BE MADE PURSUANT TO 2 SECTION 40-1-210; TO AMEND SECTION 40-2-570, AS 3 AMENDED, RELATING TO DISCIPLINARY ACTION 4 AVAILABLE TO THE BOARD FOR A VIOLATION, SO AS 5 TO REMOVE LANGUAGE REQUIRING A HEARING BE 6 MADE PURSUANT TO SECTION 40-2-310; TO AMEND 7 SECTION 40-2-580, AS AMENDED, RELATING TO 8 INITIATION OF PROCEEDINGS, SO AS TO REMOVE 9 LANGUAGE PROVIDING A PROCEDURE AVAILABLE IN 10 ARTICLE 1, CHAPTER 40 IS APPLICABLE AND BINDING 11 ON A PROCEDURE IN THIS ARTICLE; AND TO REPEAL 12 SECTION 40-2-340 RELATING TO A CERTAIN 13 DISCLAIMER. 14 15 Be it enacted by the General Assembly of the State of South 16 Carolina: 17 18 SECTION 1. Article 1, Chapter 2, Title 40 of the 1976 Code is 19 amended by adding: 20 21 “Section 40-2-12. (A) The board shall employ an executive 22 director who shall serve at the pleasure of the Secretary of State. 23 The executive director shall direct the affairs of the board; keep 24 records of all proceedings, transactions, communications, and 25 official acts of the board; be custodian of all records of the board; 26 and perform duties that the board may require. The executive 27 director shall call a meeting of the board at the direction of the 28 chair of the board or upon the written request of three or more 29 board members. 30 (B) The board shall employ an investigator who shall conduct 31 investigations at the direction of the board and other staff 32 necessary to carry out the requirements of this chapter. 33 (C) The Office of the Secretary of State shall provide counsel 34 to the board. In addition, subject to the approval of the Secretary 35 of State, the board may employ other counsel as it considers 36 necessary.” 37 38 SECTION 2. Article 1, Chapter 2, Title 40 of the 1976 Code is 39 amended by adding: 40 41 “Section 40-2-14. (A)(1) The Office of the Secretary of State 42 is responsible for all administrative, fiscal, investigative,

1 [1238] 3 1 inspectional, clerical, secretarial, and license renewal operations 2 and activities of the board. 3 (2) The Secretary shall employ and supervise personnel 4 necessary to effectuate the provisions of this article for the board. 5 When hiring a person charged with evaluating or administering 6 professional qualifications or licensing standards, the Secretary 7 may select from a list of three candidates submitted by the board. 8 The authority to remove an employee of the Office of the South 9 Carolina Secretary of State is vested with the Secretary. 10 (3) The Secretary shall establish compensation for personnel 11 assigned to the board as he considers necessary and appropriate for 12 the administration of this article. Compensation and necessary 13 expenses incurred in the performance of duties by personnel 14 assigned to the board must be paid as an expense of the board in 15 the administration of this article. 16 (4) The Secretary shall enter into contracts and agreements 17 the Secretary considers necessary or incidental to carry out the 18 provisions of this article to provide for all services required by the 19 board. 20 (5) A board member must be compensated for his services at 21 the usual rate for mileage, subsistence, and per diem as provided 22 by law for members of state boards, committees, and commissions. 23 Board members may be reimbursed for actual and necessary 24 expenses incurred in connection with and as a result of their work 25 as members of the board. The Secretary, within the limits set by 26 the Comptroller General, shall establish reimbursement standards 27 for travel and other expenses incurred by a board member in the 28 performance of the board member’s official duties. Compensation 29 and reimbursements paid to a board member under this subsection 30 must be paid as an expense of the board in the administration of 31 this article and the board’s chapter and must be paid from the fees 32 received by the board pursuant to the provisions of this article or in 33 a manner prescribed by the Secretary. 34 (6) The Secretary shall maintain a separate account for funds 35 collected on behalf of the board and shall indicate the expenses 36 allotted to the board. The Secretary may perform additional 37 administrative functions requested by the board. 38 (B)(1) The Secretary shall keep a record of the proceedings of 39 the board and shall maintain a registry of all applications for 40 licensure and registration. The registry shall include the name, 41 age, and last known address of an applicant; the place of business 42 of the applicant; the education, experience, and other qualifications 43 of the applicant; the type of examination required; whether or not

1 [1238] 4 1 an authorization to practice was granted; the date of the action of 2 the Secretary; and other information considered necessary by the 3 board. 4 (2) Except as otherwise required by law, the record of the 5 board’s proceedings and its registry of applicants must be open to 6 public inspection, and a copy of the registry must be provided 7 upon request and payment of a fee. 8 (3) Records of the board and its registry are prima facie 9 evidence of its proceedings, and a copy certified by the Secretary 10 under seal is admissible as evidence with the same force and effect 11 as the original. 12 (C) The Secretary may prepare and publish a roster for the 13 board containing the names and places of businesses of persons 14 licensed under this article. A copy of the roster must be provided 15 upon request and upon payment of a fee that may not exceed the 16 cost of printing and distribution of the roster. 17 (D)(1) Initial fees for the board must be established by the board 18 and shall serve as the base for necessary administrative 19 adjustments. The board, on at least an annual basis, shall provide 20 the Secretary with a statement of anticipated expenditures, 21 program changes, and other information that may be used in 22 determining fees for the next annual period. 23 (2) Fees for the board must be assessed, collected, and 24 adjusted on behalf of the board by the Secretary in accordance with 25 this article. Fees may be adjusted annually to ensure that they are 26 sufficient but not excessive to cover expenses, including the total 27 of the direct and indirect costs to the State, for the operation of the 28 board. Fees must be deposited in accounts established for the 29 board. 30 (3) The following steps must be used in the development and 31 analysis of fee structures: 32 (a) Determine current financial position of the program. 33 Each month, the Office of the Secretary of State’s administrative 34 section shall prepare statements reflecting monthly revenue 35 collection activity and related program expenses for each board 36 program. The financial standing of a board program must be 37 reviewed annually. 38 (b) Project future activity and related costs of the 39 program. By reviewing historical volume information and 40 adjusting trends to reflect changes in the industry, changes in the 41 program, indicators from the board members to the staff, and 42 general economic indicators, project program activity including, 43 but not limited to, renewals and new applicants for the upcoming

1 [1238] 5 1 two to three years. Based on these population projections, forecast 2 program revenues using the current fee structure. With input from 3 the board and the staff, analyze related program direct board costs 4 for the upcoming two to three years, based on historical trends, 5 changes in program requirements, changes to expenditure centers, 6 and changes in staffing requirements. To these direct costs, add 7 the program’s proportionate share of other related costs of the 8 program including, but not limited to, administration of exams, 9 agency administration, and information systems to arrive at the 10 total program cost. 11 (c) Determine the projected financial position of the 12 program, propose changes where necessary, and compare the total 13 projected revenue at the current fees to the total projected costs of 14 the program over the next two to three years. If the current fees 15 and the projected program activity do not support the projected 16 program’s expenses, develop alternative fee structures that would 17 ensure the program’s continuing financial stability as required by 18 law. 19 (d) Present findings to the Secretary and staff for 20 discussion, revision, evaluation, and adoption. While developing 21 fee analyses, maintain communications with staff and agency 22 management to ensure all necessary factors are evaluated and cost 23 savings, efficiencies, and alternative cost-reduction scenarios are 24 pursued. Present fee analyses to board staff and management for 25 discussion and revision where necessary. Propose alternatives to 26 the Secretary for consideration when preparing to adopt proposed 27 fee schedules to achieve a structure sufficient to support the 28 program. 29 (e) All fees are nonrefundable. 30 (E) Where appropriate, the Secretary shall adopt the necessary 31 procedures to implement the annual renewal of authorizations to 32 practice in a manner as to ensure that the number of renewals is 33 reasonably and evenly distributed throughout each two-year 34 period. During any transition, fees must be proportionate to the 35 annual fee. 36 (F)(1) The board may elect to delegate to the Secretary the 37 authority to issue an authorization to practice to an applicant 38 whose proof of qualifications falls within established guidelines set 39 by the board. 40 (2) The board may elect to delegate to the Secretary the 41 authority to deny an authorization to practice to an applicant who 42 has committed an act that would be grounds for disciplinary action 43 under this article or the licensing act of the board, who has failed

1 [1238] 6 1 to comply with a final order of a board, or who has failed to 2 demonstrate the basic qualifications or standards for practice 3 authorization contained in the board’s licensing act. The applicant 4 may appeal the denial to the board that has final regulatory 5 decision-making authority for reconsideration. The board may 6 uphold the denial, order issuance of the authorization to practice, 7 or order issuance of the authorization to practice upon conditions 8 set by the board. If the administrative decision is upheld, the 9 applicant may reapply at the end of a twelve-month period. 10 (G) The Secretary shall suspend an authorization to practice 11 issued pursuant to this article if the person to whom the 12 authorization was granted submits to the board a check, money 13 draft, or similar instrument for payment of a fee which is not 14 honored by the financial institution named. The suspension 15 becomes effective ten days following delivery by certified mail of 16 written notice of the dishonor and the impending suspension to the 17 person’s address. Upon notification of suspension, the person may 18 reinstate the authorization to practice upon payment of the fee and 19 penalties required under statute or regulation. This suspension is 20 exempt from the Administrative Procedures Act. 21 (H) The Office of the Secretary of State may prepare an annual 22 report for submission to the Governor and the General Assembly. 23 It is the duty of the Secretary to notify and seek approval of the 24 board at least thirty days in advance of filing with Legislative 25 Council as required by Section 1-23-30 of a proposed change in a 26 regulation which may affect the practice or service of the licensing 27 board.” 28 29 SECTION 3. Article 1, Chapter 2, Title 40 of the 1976 Code is 30 amended by adding: 31 32 “Section 40-2-16. (A) Administrative fee and fine revenue 33 received pursuant to this chapter in a fiscal year may be retained 34 by the Secretary of State to offset the expenses of enforcing this 35 chapter. A fee collected pursuant to this chapter must be 36 transmitted to the State Treasurer and deposited in a fund separate 37 and distinct from the state general fund and used by the Secretary 38 for the purpose of administering the provisions of this chapter. 39 (B) The budget of the board must include adequate funds for 40 the expenses of administering the provisions of this chapter, which 41 may include, but are not limited to, the costs of conducting 42 investigations, of taking testimony, and of procuring the 43 attendance of witnesses before the board or its committees; all

1 [1238] 7 1 legal proceedings undertaken for the enforcement of this chapter; 2 participation in national efforts to regulate the accounting 3 profession; and educational and licensing programs for the benefit 4 of the public, the licensees, and their employees. Initial fees must 5 be established by the board and shall serve as the basis for 6 necessary adjustments in accordance with Section 40-2-14(D).” 7 8 SECTION 4. Article 1, Chapter 2, Title 40 of the 1976 Code is 9 amended by adding: 10 11 “Section 40-2-115. The board has jurisdiction over the actions 12 committed or omitted by current and former licensees during the 13 entire period of licensure. The board has jurisdiction to act on a 14 matter that arises during the authorization to practice period.” 15 16 SECTION 5. Article 1, Chapter 2, Title 40 of the 1976 Code is 17 amended by adding: 18 19 “Section 40-2-195. (A) A communication, whether oral or 20 written, made by or on behalf of a person to the Secretary, board, 21 or a person designated by the Secretary or board to investigate or 22 hear matters relating to the discipline of a licensee, whether by 23 complaint or testimony, is privileged and no action or proceeding, 24 civil or criminal, may be brought against the person by or on 25 whose behalf the communication is made, except upon proof that 26 the communication was made with malice. 27 (B) Nothing in this article may be construed as prohibiting the 28 respondent or the respondent’s legal counsel from exercising the 29 respondent’s constitutional right of due process under the law or as 30 prohibiting the respondent from normal access to the charges and 31 evidence filed against the respondent as part of due process under 32 the law. 33 (C) Notwithstanding the provisions of this section, a final order 34 of the board disciplining a licensee or revoking the registration of a 35 firm is public information.” 36 37 SECTION 6. Article 1, Chapter 2, Title 40 of the 1976 Code is 38 amended by adding: 39 40 “Section 40-2-205. A person who practices or offers to practice 41 a regulated profession or occupation in this State in violation of 42 this article or who knowingly submits false information for the 43 purpose of obtaining a license is guilty of a misdemeanor and,

1 [1238] 8 1 upon conviction, must be imprisoned not more than one year or 2 fined not more than fifty thousand dollars.” 3 4 SECTION 7. Article 1, Chapter 2, Title 40 of the 1976 Code is 5 amended by adding: 6 7 “Section 40-2-515. An accounting practitioner or firm of 8 accounting practitioners is permitted to associate his or the firm’s 9 name with compiled financial statements as defined by 10 Professional Standards for Accounting and Review Services, 11 provided the following disclaimer is used: 12 ‘I (we) have compiled the accompanying balance sheet of XYZ 13 Company as of December 31, XXXX, and the related statements 14 of income, retained earning and cash flows for the year then ended, 15 in accordance with statements on Standards for Accounting and 16 Review Services issued by the American Institute of Certified 17 Public Accountants. A compilation is limited to presenting, in the 18 form of financial statements, information that is the representation 19 of management (owners). I (we) have not audited or reviewed the 20 accompanying financial statements and I am (we are) prohibited 21 by law from expressing an opinion on them.’” 22 23 SECTION 8. Section 40-1-40 of the 1976 Code is amended to 24 read: 25 26 “Section 40-1-40. (A) The purpose of the Division of 27 Professional and Occupational Licensing, South Carolina 28 Department of Labor, Licensing and Regulation, is to protect the 29 public through the regulation of professional and occupational 30 licensees and the administration of boards charged with the 31 regulation of professional and occupational practitioners. 32 (B) The following boards and the professions and occupations 33 they license or otherwise regulate must be administered by the 34 Department of Labor, Licensing and Regulation pursuant to this 35 article: 36 Board of Accountancy 37 Board of Architectural Examiners 38 Athletic Commission 39 Auctioneers Commission 40 Board of Barber Examiners 41 Accessibility Committee of the Building Codes Council 42 Building Code Council 43 Board of Chiropractic Examiners

1 [1238] 9 1 Contractors’ Licensing Board 2 Board of Cosmetology 3 Board of Dentistry 4 Engineers and Land Surveyors Board 5 Environmental Certification Board 6 Board of Registration for Foresters 7 Board of Funeral Service 8 Board of Registration for Geologists 9 Manufactured Housing Board 10 Board of Medical Examiners 11 Modular Buildings Board of Appeals 12 Board of Nursing 13 Long Term Health Care Administrators Board 14 Board of Occupational Therapy 15 Board of Examiners in Opticianry 16 Board of Examiners in Optometry 17 Board of Pharmacy 18 Board of Physical Therapy Examiners 19 Pilotage Commission 20 Board of Podiatry Examiners 21 Board of Examiners for Licensure of Professional Counselors and 22 Marital and Family Therapists 23 Board of Examiners in Psychology 24 Board of Pyrotechnic Safety 25 Real Estate Appraisers Board 26 Real Estate Commission 27 Residential Builders Commission 28 Board of Social Work Examiners 29 Board of Examiners in Speech-Language Pathology and 30 Audiology 31 Board of Veterinary Medical Examiners 32 (C) Each regulatory board within the department is a separate 33 board. 34 (D) The Department of Labor, Licensing and Regulation is a 35 member of the Governor’s executive cabinet and must be headed 36 by a director who must be appointed by the Governor with the 37 advice and consent of the Senate, subject to removal from office 38 by the Governor pursuant to Section 1-3-240(B). The director 39 shall supervise the department under the direction and control of 40 the Governor and shall exercise other powers and perform other 41 duties as the Governor requires.” 42

1 [1238] 10 1 SECTION 9. Section 40-2-10 of the 1976 Code, as last amended 2 by Act 289 of 2004, is further amended to read: 3 4 “Section 40-2-10. (A)(1) There is created a Board of 5 Accountancy within the Office of the Secretary of State. 6 (2) The Board of Accountancy established in subsection (A) 7 and previously operating in the Department of Labor, Licensing 8 and Regulation, is continued and reestablished as a new board in 9 the Office of the Secretary of State. The duties, functions, and 10 responsibilities of the Board of Accountancy are devolved upon 11 the Office of the Secretary of State effective July 1, 2008. All 12 personnel, files, property, appropriations, carry forward funds from 13 the Board of Accountancy, and full - time equivalent positions of 14 the Department of Labor, Licensing and Regulation supporting the 15 Board of Accountancy also must be transferred to the Office of the 16 Secretary of State effective July 1, 2008. The staff must be hired 17 and supervised by the Secretary of State or the his designee, and 18 shall continue to exercise their present Department of Labor, 19 Licensing and Regulation duties and responsibilities under the 20 auspices of the Office of the Secretary of State and shall perform 21 other functions and duties as the Secretary of State prescribes. 22 (3) The State Budget and Control Board shall assist with 23 actions necessary to accomplish this transfer in consultation with 24 the agency heads of the transferring and receiving agencies. 25 (4) The Office of the Secretary of State shall have the 26 responsibility of enforcing this chapter and may by regulation 27 establish rules and procedures for the implementation of the 28 provisions of this chapter. 29 (B) There is created the South Carolina Board of Accountancy 30 which The board is responsible for the administration and 31 enforcement of this chapter. The board and shall consist of nine 32 members appointed by the Governor, all of whom: 33 (1) all must be residents of this State; 34 (2) five of whom must be licensed certified public 35 accountants,; 36 (3) two of whom must be licensed public accountants or 37 licensed accounting practitioners,; and 38 (4) two of whom must be members of the public who are not 39 engaged in the practice of public accounting, have no without a 40 financial interest in the profession of public accounting, and have 41 no without an immediate family member in the profession of 42 public accounting. As used in this section, ‘immediate family 43 member’ is defined in Section 8-13-100(18).

1 [1238] 11 1 (C) Members are A member is appointed for terms a term of 2 four years and serve serves until their successors are his successor 3 is appointed and qualify qualified. Vacancies A vacancy must be 4 filled by the Governor for the unexpired portions portion of the 5 term. The Governor shall remove a member of the board in 6 accordance with Section 1-3-240. 7 (B)(D) The board annually shall elect annually from among its 8 members a chairman, a vice chairman, and a Secretary. The board 9 shall meet at least two times a year at places fixed by the chairman. 10 Meetings A meeting of the board must be open to the public except 11 those unless concerned with investigations an investigation under 12 Sections 40-2-80 and 40-2-90 and except as necessary to protect 13 confidential information in accordance with pursuant to a board 14 regulations regulation or other state law. A majority of the board 15 members in office constitutes a quorum at any a meeting of the 16 board. A board member shall attend meetings or provide proper 17 notice and justification of his inability to attend. Unexcused 18 absences from meetings may result in removal from the board as 19 provided for in Section 1-3-240. 20 (C)(E) The board shall have a seal which that must be judicially 21 noticed. In any court proceeding, a civil or criminal court 22 proceeding, arising out of or founded upon any a provision of this 23 chapter, copies of any records a copy of a record certified as a true 24 copies copy under the seal of the board are is admissible in 25 evidence as proving to prove the contents of these records content 26 of the record. 27 (D) All monies collected by the Department of Labor, 28 Licensing and Regulation from fees authorized to be charged by 29 this chapter must be received and accounted for by the Department 30 of Labor, Licensing and Regulation and must be deposited in the 31 State Treasury. The budget of the board must include adequate 32 funds for the expenses of administering the provisions of this 33 chapter, which may include, but is not limited to, the costs of 34 conducting investigations, of taking testimony, and of procuring 35 the attendance of witnesses before the board or its committees; all 36 legal proceedings undertaken for the enforcement of this chapter; 37 participation in national efforts to regulate the accounting 38 profession, and educational and licensing programs for the benefit 39 of the public, the licensees and their employees. Initial fees must 40 be established by the board and shall serve as the basis for 41 necessary adjustments in accordance with Section 40-1-50(D).

1 [1238] 12 1 (E)(F) The board may appoint committees or persons, to advise 2 or assist it in the administration and enforcement of this chapter, as 3 it sees fit.” 4 5 SECTION 10. Section 40-2-20 of the 1976 Code, as last 6 amended by Act 289 of 2004, is further amended to read: 7 8 “Section 40-2-20. As used in this chapter: 9 (1) ‘AICPA’ means the American Institute of Certified Public 10 Accountants or successor organizations. 11 (2) ‘Attest means providing the following financial statement 12 services: 13 (a) an audit or other engagement to be performed in 14 accordance with the Statements on Auditing Standards (SAS); or 15 (b) a review of a financial statement to be performed in 16 accordance with the Statements on Standards for Accounting and 17 Review Services (SSARS); or 18 (c) an examination of prospective financial information to be 19 performed in accordance with the Statements on Standards for 20 Attestation Engagements (SSAE). 21 (3) ‘Board’ means the South Carolina Board of Accountancy. 22 (4) ‘Client’ means a person or entity that agrees with a licensee 23 or licensee’s employer to receive any a professional service. 24 (5) ‘Compilation’ means providing a service to be performed 25 in accordance with Statements on Standards for Accounting and 26 Review Services (SSARS) that which presents in the form of 27 financial statements, information representative of management 28 (owners) without undertaking expression of any an assurance on 29 the statements. 30 (6) ‘Department’ means the Department of Labor, Licensing 31 and Regulation ‘Secretary’ means the South Carolina Secretary of 32 State or his official designee. 33 (7) ‘Direct’ means the person supervised in the usual line of 34 authority or is in a staff position reporting to the supervisor. Direct 35 supervision means a clear-cut personal connection to the employee 36 being supervised, marked by a firsthand knowledge and 37 association. 38 (8) ‘Experience’ means providing any a type of service or 39 advice involving the use of accounting, attest, compilation, 40 management advisory, financial advisory, tax, or consulting skills 41 whether gained through employment in government, industry, 42 academia, or public practice.

1 [1238] 13 1 (9) ‘Firm’ means a sole proprietorship, a corporation, a 2 partnership or any other form of organization registered under this 3 chapter. ‘Firm’ includes a person or persons practicing public 4 accounting in the form of a proprietorship, partnership, limited 5 liability partnership, limited liability company, or professional 6 corporation or association. 7 (10) ‘License’ means authorization to practice as issued under 8 this chapter. 9 (11) ‘Licensee’ means the holder of a license. 10 (12) ‘Manager’ means a licensee in responsible charge of an 11 office. 12 (13) ‘NASBA’ means the National Association of State Boards 13 of Accountancy. 14 (14) ‘Peer review’ means a study, appraisal, or review of one or 15 more aspects of the professional work of a licensee of the board or 16 a firm registered with the board that performs attest or compilation 17 services by a person or persons who hold certificates and who are 18 not affiliated with the certificate holder or certified public 19 accountant firm being reviewed. 20 (15) ‘Practice of accounting’ means: 21 (a) issuing a report on financial statements of a person, firm, 22 organization, or governmental unit or offering to render or 23 rendering any an attest or compilation service. This restriction does 24 not prohibit any an act of a public official or public employee in 25 the performance of that person’s duties or prohibit the performance 26 by a nonlicensee of other services involving the use of accounting 27 skills, including the preparation of tax returns, management 28 advisory services, and the preparation of financial statements 29 without the issuance of reports on the financial statement; or 30 (b) using or assuming the title ‘Certified Public Accountant’ 31 or the abbreviation ‘CPA’ or any other another title, designation, 32 words, letters, abbreviation, sign, card, or device tending to 33 indicate that the person is a certified public accountant. 34 (16) ‘Professional’ means arising out of or related to the 35 specialized knowledge or skills associated with licensees. 36 (17) ‘Report’, when used with reference to financial statements, 37 means an opinion, report, or other form of language that states or 38 implies assurance as to the reliability of a financial statement and 39 that also includes or is accompanied by a statement or implication 40 that the person or firm issuing it has special knowledge or 41 competency in accounting or auditing. This statement or 42 implication of special knowledge or competency may arise from 43 use by the issuer of the report of names or titles indicating that the

1 [1238] 14 1 person or firm is an accountant or auditor. The term ‘report 2 includes any form of language which disclaims an opinion when 3 the form of language is conventionally understood to imply 4 positive assurance as to the reliability of the financial statements 5 referred to or special competency on the part of the person or firm 6 issuing such language, or both; and it includes any other another 7 form of language that is conventionally understood to imply such 8 this assurance or such special knowledge or competency, or both. 9 (18) ‘Resident manager’ means a responsible party for a firm. 10 (19) ‘Registration’ means an authorization to practice as a firm 11 issued under this chapter. 12 (20) ‘State’ means any a state of the United States, the District 13 of Columbia, Puerto Rico, the United States Virgin Islands, and 14 Guam; except that ‘this State’ means the State of South Carolina. 15 (21) ‘Substantial equivalency’ is a determination by the Board 16 of Accountancy or its designee that the education, examination, 17 and experience requirements contained in the statutes and 18 administrative rules of another jurisdiction are comparable to, or 19 exceed the education, examination, and experience requirements 20 contained in this chapter, or that an individual licensee’s 21 education, examination, and experience qualifications are 22 comparable to or exceed the education, examination, and 23 experience requirements contained in this chapter. 24 (22) ‘Supervision’ means having jurisdiction, oversight, or 25 authority over the practice of accounting and over the people who 26 practice accounting.” 27 28 SECTION 11. Section 40-2-70 of the 1976 Code, as last 29 amended by Act 289 of 2004, is further amended to read: 30 31 “Section 40-2-70. In addition to the powers and duties 32 provided in Section 40-1-70, The board may: 33 (1) determine the eligibility of applicants for examination and 34 licensure; 35 (2) examine applicants for licensure including, but not limited 36 to: 37 (a) prescribing the subjects, character, and manner of 38 licensing examinations; 39 (b) preparing, administering, and grading the examination or 40 assisting in the selection of a contractor to prepare, administer, or 41 grade the examination; and

1 [1238] 15 1 (c) charging, or authorizing a third party administering the 2 examination to charge, each applicant a fee in an adequate amount 3 to cover examination costs; 4 (3) establish criteria for issuing, renewing, and reactivating 5 authorizations for qualified applicants to practice, including 6 issuing active or permanent, temporary, limited, and inactive 7 licenses or other categories as may be created; 8 (4) adopt a code of professional ethics appropriate to the 9 profession; 10 (5) evaluate and approve continuing education course hours 11 and programs; 12 (6) conduct hearings on alleged violations of this chapter and 13 regulations promulgated under this chapter; 14 (7) participate in national efforts to regulate the accounting 15 profession; 16 (8) discipline licensees or registrants a licensee or registrant in 17 a manner provided for in this chapter; 18 (9) project future activity of the program based on historical 19 trends and program requirements, including the cost of licensure 20 and renewal, conducting investigations and proceedings, 21 participating in national efforts to regulate the accounting 22 profession, and providing educational programs for the benefit of 23 the public and licensees and their employees; 24 (10) issue safe harbor language nonlicensees may use in 25 connection with financial statements, transmittals, or financial 26 information which does not purport to be in compliance with the 27 Statements on Standards for Accounting and Review Services 28 (SSARS); 29 (11) promulgate regulations that have been submitted to the 30 director at least thirty days in advance of filing with the Legislative 31 Council as required by Section 1-23-30, including, but not limited 32 to, a schedule of fees for examination, licensure, and regulation; 33 and 34 (12) promulgate standards for peer review.” 35 36 SECTION 12. Section 40-2-80 of the 1976 Code, as last amended 37 by Act 289 of 2004, is further amended to read: 38 39 “Section 40-2-80. (A) The department Secretary, upon receipt 40 of a complaint or other information suggesting violation of this 41 chapter or of regulations promulgated pursuant to this chapter, 42 shall conduct an appropriate investigation to determine whether 43 there is probable cause to institute proceedings. An investigation

1 [1238] 16 1 under this section is not a prerequisite to conducting proceedings if 2 a determination of probable cause can be made without 3 investigation. In aid of investigations, the administrator of the 4 board may issue subpoenas to compel witnesses to testify or to 5 produce evidence, or both. 6 (B) The board may designate persons of appropriate 7 competency to assist in an investigation. 8 (C) The results of an investigation must be presented to the 9 board. If these results indicate a violation has occurred or a 10 licensee is unfit to practice in the profession, the board may take 11 disciplinary action in accordance with the Administrative 12 Procedures Act. A disciplinary action only may be taken after a 13 matter is presented to the board and voted on by the board. The 14 board may designate a hearing officer or hearing panel to conduct 15 a hearing or take another action it considers necessary under this 16 action. 17 (D) For the purpose of an investigation under this section, the 18 department Secretary may administer oaths and issue subpoenas 19 for the attendance and testimony of witnesses and the production 20 and examination of books, papers, and records on behalf of the 21 board or, upon request, on behalf of a party to the case. Upon 22 failure to obey a subpoena or to answer questions propounded by 23 the board or its hearing officer or panel, the board may apply to the 24 Administrative Law Court for an order requiring compliance with 25 the subpoena. 26 (E) The testimony and documents submitted in support of the 27 complaint or gathered in the investigation must be treated as 28 confidential information and must not be disclosed to any person 29 except law enforcement authorities and, to the extent necessary in 30 order to conduct the investigation, the subject of the investigation, 31 persons whose complaints are being investigated, and witnesses 32 questioned in the course of the investigation. 33 (F) The board may review the publicly available professional 34 work of licensees, and all professional work submitted to the State, 35 on a general and random basis, without any requirement of a 36 formal complaint or suspicion of impropriety. If as a result of a 37 review the board discovers reasonable grounds for a more specific 38 investigation, the board may proceed under subsections (A) 39 through (E). 40 (G) If the department Secretary receives information indicating 41 a possible violation of state or federal law, the department he may 42 provide that information, to the extent the department he considers

1 [1238] 17 1 necessary, to the appropriate state or federal law enforcement 2 agency or regulatory body.” 3 4 SECTION 13. Section 40-2-90(A) of the 1976 Code, as added 5 by Act 289 of 2004, is amended to read: 6 7 “(A) If the Department of Labor, Licensing and Regulation 8 Secretary or the board has reason to believe that a licensee or 9 registrant has violated a provision of this chapter or a regulation 10 promulgated pursuant to this chapter, or that a licensee has become 11 unfit to practice as a certified public accountant, a public 12 accountant, or an accounting practitioner, the department Secretary 13 shall present its evidence to the board and the board may, in 14 accordance with the Administrative Procedures Act, take action as 15 authorized by law. The board may designate a hearing officer or 16 panel to conduct hearings or take other action as may be 17 necessary.” 18 19 SECTION 14. Section 40-2-100 of the 1976 Code, as last 20 amended by Act 289 of 2004, is further amended to read: 21 22 “Section 40-2-100. (A) If the board has reason to believe that a 23 person is violating or intends to violate a provision of this chapter 24 or a regulation promulgated pursuant to this chapter, in addition to 25 all other remedies, it may order the person immediately to cease 26 and desist from engaging in the conduct. If the person is 27 practicing accountancy without being licensed pursuant to this 28 chapter, is violating an order of the board, a provision of this 29 chapter, or a regulation promulgated pursuant to this chapter, the 30 board also may apply, in accordance with the rules of the 31 Administrative Law Court for a temporary restraining order. A 32 board member or the Director of the Department of Labor, 33 Licensing and Regulation or another employee of the department, 34 the Secretary, or an employee of the Secretary may not be held 35 liable for damages resulting from a wrongful temporary restraining 36 order. 37 (B) The board may seek from the Administrative Law Court 38 other equitable relief to enjoin the violation or intended violation 39 of this chapter or a regulation promulgated pursuant to this 40 chapter.” 41 42 SECTION 15. Section 40-2-110 of the 1976 Code, as last 43 amended by Act 289 of 2004, is further amended to read:

1 [1238] 18 1 2 “Section 40-2-110. (A) After notice and hearing pursuant to the 3 Administrative Procedures Act, the board may revoke, suspend, 4 refuse to renew, reprimand, censure, or limit the scope of practice 5 of a licensee and impose an administrative fine not exceeding ten 6 thousand dollars per violation. The board also may place a licensee 7 on probation, require a peer review as the board may specify, or 8 require satisfactory completion of a continuing professional 9 education program as the board may specify, all with or without 10 terms, conditions, and limitations, for any one or more of the 11 following reasons: 12 (1) conviction of a felony, or of any a crime with an element 13 of dishonesty or fraud, under the laws of the United States, of this 14 State, or of any other another state if the acts involved constitute a 15 crime under state laws; 16 (2) conduct reflecting adversely upon the licensee’s fitness 17 to perform services as a licensee; 18 (3) use of a false, fraudulent, or forged statement or 19 document, or committal of a fraudulent, deceitful, or dishonest act, 20 or omission of a material fact in obtaining licensure pursuant to 21 this chapter; 22 (4) intentional use of a false or fraudulent statement in a 23 document connected with the practice of the individual’s 24 profession or occupation; 25 (5) obtaining fees or assistance in obtaining fees under 26 fraudulent circumstances; 27 (6) failure to comply with established professional standards, 28 including standards set by federal or state law or regulation; 29 (7) violation of the code of professional ethics adopted by 30 the board or of the AICPA Professional Standards: Code of 31 Professional Conduct; 32 (8) failure to respond to requests for information or to 33 cooperate in investigations on behalf of the board; 34 (9) engagement or aid of another, intentionally or 35 knowingly, directly or indirectly, in unlicensed practice of 36 accounting; 37 (10) failure to disclose or disclaim the appropriate license 38 status of a person or entity not holding a license but associated 39 with financial statements; 40 (11) engagement in advertising or other forms of solicitation 41 or use of a firm name in a manner that is false, misleading, 42 deceptive, or tending to promote unsupported claims;

1 [1238] 19 1 (12) the revocation, suspension, reprimand, or other discipline 2 of the right to practice by the licensee in any other another state or 3 by a federal agency for a cause other than the failure to pay an 4 annual registration fee; 5 (13) intentionally or knowingly, directly or indirectly, having 6 violated, aided, or abetted in the violation or conspiracy to violate 7 this article or a regulation promulgated under this article; 8 (14) having committed a dishonorable, unethical, or 9 unprofessional act that is likely to deceive, defraud, or harm the 10 public; 11 (15) having been convicted of or having pled guilty to or nolo 12 contendere to a felony or a crime involving drugs or moral 13 turpitude; 14 (16) having practiced the profession or occupation while 15 under the influence of alcohol or drugs to such a degree as to 16 render him unfit to practice his profession or occupation; 17 (17) having sustained a physical or mental disability which 18 renders further practice dangerous to the public; or 19 (18) having violated a provision of this article or of a 20 regulation promulgated under this article. 21 (B) After notice and hearing, as provided in Section 40-2-90, 22 the board shall revoke the registration of a firm if at any time it 23 does not meet the requirements prescribed by Section 40-2-40 and 24 also may revoke, suspend, refuse to renew, reprimand, censure, or 25 limit the scope of practice of a registrant and impose an 26 administrative fine not to exceed ten thousand dollars per violation 27 for any of the causes enumerated in subsection (A) or for In 28 addition, the board may: 29 (1) issue a public reprimand; 30 (2) place a licensee on probation or restrict or suspend the 31 individual’s license for a definite or indefinite time and prescribe 32 conditions to be met during probation, restriction, or suspension, 33 including, but not limited to, satisfactory completion of additional 34 education, a supervisory period, or continuing education; 35 (3) permanently suspend, refuse to renew, or revoke the 36 license of a registrant or reprimand, censure, or limit the scope of 37 practice; and 38 (4) impose an administrative fine not to exceed ten thousand 39 dollars per violation for a cause of action provided in subsection 40 (A) or: 41 (1)(a) the revocation or suspension or refusal to renew the 42 license to practice of a member of a firm;

1 [1238] 20 1 (2)(b) the revocation, suspension, reprimand, or other 2 discipline of the right to practice by the firm in any other another 3 state or by a federal agency for a cause other than the failure to pay 4 an annual registration fee; or 5 (3)(c) the failure to notify the board in writing, within 6 thirty days after its occurrence, of any a revocation, suspension, 7 reprimand, or other discipline of the right to practice by the 8 licensee in any other another state or by a federal agency. 9 (C) A final order of the board disciplining a licensee under this 10 section is public information. 11 (D) Upon a determination by the board that discipline is not 12 appropriate, the board may issue a nondisciplinary letter of 13 caution. 14 (E) The board may establish a procedure to allow a licensee 15 who has been issued a public reprimand to petition the board for 16 expungement of the reprimand from the licensee’s record. 17 (F) Licensees A licensee of this State offering or rendering 18 services or using their who offers or renders a service or uses his 19 ‘Certified Public Accountant’ title in another state are is subject to 20 disciplinary action in this State for an act committed in another 21 state for which the licensee would be subject to discipline. 22 (G) After notice and hearings, as provided in Section 40 - 2 - 90, 23 the board shall revoke the registration of a firm who fails to meet a 24 requirement of Section 40 - 2 - 40.” 25 26 SECTION 16. Section 40-2-170(C) of the 1976 Code, as last 27 amended by Act 289 of 2004, is further amended to read: 28 29 “(C) Failure to make timely payment in accordance with the 30 order results in the collection of costs in accordance with Section 31 40-1-180 40 - 2 - 180.” 32 33 SECTION 17. Section 40-2-180 of the 1976 Code, as last 34 amended by Act 289 of 2004, is further amended to read: 35 36 “Section 40-2-180. (A) All costs and fines A cost and fine 37 imposed pursuant to this chapter are is due and payable 38 immediately upon imposition or at the time indicated by final order 39 of the board. Unless the costs and fines are cost or fine is paid 40 within sixty days of the date they are it is due, the order becomes a 41 judgment and may be filed and executed upon in the same manner 42 as a judgment in the court of common pleas, and the board may 43 collect costs and attorney’s fees incurred in executing the

1 [1238] 21 1 judgment. Interest at the legal rate accrues on the amount due from 2 the date imposed until the date paid. All costs and fines A cost and 3 fine imposed pursuant to this chapter must be paid in accordance 4 with and are subject to the collection and enforcement provisions 5 of Section 40-1-180 and is subject to the collection and 6 enforcement provisions of the Setoff Debt Collection Act. 7 (B) All fines and costs A fine and cost collected under this 8 chapter must be remitted by the department Secretary to the State 9 Treasurer and deposited in a special fund established for the 10 department Office of the Secretary of State to defray the 11 administrative costs associated with investigations and hearings 12 under this chapter.” 13 14 SECTION 18. Section 40-2-210 of the 1976 Code, as last 15 amended by Act 289 of 2004, is further amended to read: 16 17 “Section 40-2-210. If the board believes that a person or firm 18 has engaged, or is about to engage, in an act or practice which that 19 constitutes or will constitute a violation of Section 40-2-30, the 20 board may issue a cease and desist order. The board may also 21 apply to the Administrative Law Court pursuant to Section 22 40-1-210 for an order enjoining these acts or practices, and upon a 23 showing by the board that the person or firm has engaged or is 24 about to engage in these acts or practices, the division shall grant 25 an injunction, restraining order, or other order as may be 26 considered appropriate. For each violation, The Administrative 27 Law Court may impose a fine of no more than ten thousand dollars 28 for a violation.” 29 30 SECTION 19. Section 40-2-570 of the 1976 Code, as last 31 amended by Act 289 of 2004, is further amended to read: 32 33 “Section 40-2-570. (A) After notice and hearing, pursuant to 34 Section 40-2-310 the board may: 35 (1) revoke a license or permit as accounting practitioner 36 issued under this article; 37 (2) suspend a license or permit for a period of not more than 38 five years; 39 (3) reprimand, censure, or limit the scope of practice of a 40 license or permit holder; 41 (4) impose an administrative fine not exceeding ten thousand 42 dollars; or

1 [1238] 22 1 (5) place a license or permit holder on probation, all with or 2 without terms, conditions, and limitation for any one or more of 3 these reasons: 4 (1a) fraud or deceit in obtaining a license or permit; 5 (2b) cancellation, revocation, or suspension of, or refusal to 6 renew authority to engage in the practice of public accountancy in 7 another state, territory of the United States, or the District of 8 Columbia for any cause; 9 (3c) revocation or suspension of the right to practice before 10 a state or federal agency; 11 (4d) dishonesty, fraud, or gross negligence in the practice 12 of public accounting or in filing or failure to file the license or 13 permit holder’s own income tax return; 14 (5e) violation of a provision of this article or Article 1 or a 15 regulation promulgated by the board under the authority granted 16 by this chapter; 17 (6f) violation of a rule of professional conduct 18 promulgated by the board under the authority granted by this 19 chapter; 20 (7g) conviction of a felony or any crime, an element of 21 which is dishonesty or fraud, under the laws of the United States, 22 of this State, or another state if the acts involved would have 23 constituted a crime under the laws of this State. The record of 24 conviction or a copy of the record, certified by the clerk of court or 25 the judge in whose court the conviction is had, is conclusive 26 evidence of the conviction and ‘conviction’ shall include a plea of 27 guilty or a plea of nolo contendere; 28 (8h) performance of a fraudulent act while holding a 29 license or permit under this article; or 30 (9i) conduct reflecting adversely upon the license or permit 31 holder’s fitness to engage in the practice of public accountancy. 32 (B) In lieu of or in addition to a remedy specifically provided in 33 subsection (A), the board may require one or more of these 34 requirements of a license or permit holder: 35 (1) a quality review conducted in a fashion as the board may 36 require; or 37 (2) satisfactory completion of continuing professional 38 education programs as the board may specify. 39 A ‘quality review’ means a study, appraisal, or review of one or 40 more aspects of the professional work of a person or firm in the 41 practice of public accountancy by a person or persons who hold 42 certificates or licenses and who are not affiliated with the person or 43 firm being reviewed.

1 [1238] 23 1 (C) In a proceeding in which a remedy imposed by subsections 2 (A) and (B) is imposed, the board also may require the respondent 3 license or permit holder to pay the costs of the proceeding.” 4 5 SECTION 20. Section 40-2-580 of the 1976 Code, as last 6 amended by Act 289 of 2004, is further amended to read: 7 8 “Section 40-2-580. The board may initiate proceedings under 9 this article on its own motion or on the complaint of a person, and 10 the procedures provided in Article 1 for these proceedings are 11 applicable and binding in procedures under this article.” 12 13 SECTION 21. Section 40-2-340 of the 1976 Code is repealed. 14 15 SECTION 22. If any section, subsection, paragraph, 16 subparagraph, sentence, clause, phrase, or word of this act is for 17 any reason held to be unconstitutional or invalid, such holding 18 shall not affect the constitutionality or validity of the remaining 19 portions of this act, the General Assembly hereby declaring that it 20 would have passed this act, and each and every section, subsection, 21 paragraph, subparagraph, sentence, clause, phrase, and word 22 thereof, irrespective of the fact that any one or more other sections, 23 subsections, paragraphs, subparagraphs, sentences, clauses, 24 phrases, or words hereof may be declared to be unconstitutional, 25 invalid, or otherwise ineffective. 26 27 SECTION 23. The repeal or amendment by this act of any law, 28 whether temporary or permanent or civil or criminal, does not 29 affect pending actions, rights, duties, or liabilities founded thereon, 30 or alter, discharge, release or extinguish any penalty, forfeiture, or 31 liability incurred under the repealed or amended law, unless the 32 repealed or amended provision shall so expressly provide. After 33 the effective date of this act, all laws repealed or amended by this 34 act must be taken and treated as remaining in full force and effect 35 for the purpose of sustaining any pending or vested right, civil 36 action, special proceeding, criminal prosecution, or appeal existing 37 as of the effective date of this act, and for the enforcement of 38 rights, duties, penalties, forfeitures, and liabilities as they stood 39 under the repealed or amended laws. 40 41 SECTION 24. This act takes effect July 1, 2008. 42 ----XX---- 43

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