BILL ANALYSIS                                                                                                                                                                                                    







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        |Hearing Date:April 27, 2009    |Bill No:SB                            |
        |                               |202                                   |
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                      SENATE COMMITTEE ON BUSINESS, PROFESSIONS 
                               AND ECONOMIC DEVELOPMENT
                         Senator Gloria Negrete McLeod, Chair

                          Bill No:        SB 202Author:Harman
                        As Amended:  April 22, 2009 Fiscal: Yes

        
        SUBJECT:  Private investigators: continuing education.
        
        SUMMARY:  Requires licensed private investigators, as a condition  
        of license renewal, to complete 12 hours of continuing education  
        (CE) in privacy rights, professional ethics, recent legal  
        developments relating to private investigators, and other subjects  
        related to private investigators.  Requires the Private  
        Investigator (PI) to submit to the Bureau of Security and  
        Investigative Services a sworn statement of completion of the CE.   
        Requires retention of specified CE records by providers and  
        licensees and requires providers to follow certain specified  
        standards.  Raises the license fee to $195 and the license renewal  
        fee to $145.  

         NOTE  :  This measure was heard in this Committee on April 20, 2009,  
        but was put over by the Author so that the Committee could have  
        sufficient time to review proposed amendments of the Author which  
        are now in the bill.  

        Existing law:

        1)Provides for the licensure and regulation of Private  
          Investigators by the Bureau of Security and Investigative  
          Services (Bureau) within the Department of Consumer Affairs  
          (DCA).

        2)Defines a "private investigator" as a person who, for any  
          consideration, provides protective (bodyguard) services or who  
          makes any investigation for the purpose of obtaining information  






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          regarding specified types of information including crimes,  
          information about persons, the location of lost or stolen  
          property, the cause or responsibility for fires or damage or  
          injury to persons or property, securing evidence for judicial  
          proceedings, or information regarding employees' integrity,  
          honesty, breach of rules or other standards of job performance.

        3)Requires an applicant for licensure as a PI to:

           a)   Be 18 or older;

           b)   Undergo a criminal history background check through the  
             Department of Justice and the Federal Bureau of  
             Investigation;

           c)   Have three years (2,000 hours each year, totaling 6,000  
             hours) of compensated experience in investigative work; or a  
             law or police science degree plus two years (4,000 hours) of  
             experience; or an AA degree in police science, criminal law,  
             or justice and 2  years (5,000 hours) of experience.  The  
             experience must be certified by the employer and have been  
             received while the applicant was employed as a sworn law  
             enforcement officer, military police officer, insurance  
             adjuster, employee of a licensed PI or repossessor, arson  
             investigator for a public fire suppression agency, or  
             employed by a public defender.

           d)   Pass a two-hour multiple choice examination covering laws  
             and regulations, terminology, civil and criminal liability,  
             evidence handling, undercover investigations and  
             surveillance.

           e)   Pay an application and examination fee not to exceed $50,  
             and a license fee not to exceed $175 (currently set through  
             regulation at the $175 statutory maximum).

        4)Provides that a PI license is valid for two years and requires  
          the licensee to pay a renewal fee of not more than $125  
          (currently set through regulation at the $125 statutory  
          maximum).

        5)Establishes the Private Investigator Fund (Fund), as a separate  
          "special fund" for the receipt of all revenue generated under  
          the PI licensing law.  Requires that all money in the Fund be  






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          expended in accordance with the law by the Bureau for the  
          purpose of carrying out the provisions of the PI licensing law  
          when appropriated by the Legislature.

        6)Provides that the Bureau shall consider requiring, and may  
          require, an applicant for initial licensure to submit proof of  
          satisfactory completion of a course in professional ethics, and  
          may specify which courses and course providers satisfy the  
          requirement.

        7)Provides that if the Bureau determines that a separate  
          professional ethics examination is necessary, the bureau shall  
          require that current licensees take the separate professional  
          ethics examination if appropriate.


        This bill:

        1)Requires licensed PIs, as a condition of license renewal,  
          beginning on or after January 1, 2013, to complete 12 hours of  
          continuing education in specified subjects; two hours on privacy  
          rights, two hours on professional ethics, two hours on recent  
          legal developments relating to private investigators, and six  
          hours on any subject relating to private investigators.  

        2)Licensees renewing their licenses during 2012 would only be  
          required to complete 6 hours of CE in specified subjects; two  
          hours on privacy rights, two hours on professional ethics, and  
          two hours on recent legal developments relating to private  
          investigators.

        3)Requires a licensee to submit to the DCA a signed statement with  
          the license renewal application attesting that he or she has  
          completed the specified continuing education requirements. 

        4)Requires a licensee to maintain copies of certificates  
          demonstrating completion of required CE courses for five years.

        5)Authorizes the DCA to suspend, for 60 days, the license of a PI  
          for failure to comply with the CE requirements, and revoke the  
          license at that time unless the required CE is completed and  
          documented.

        6)Authorizes DCA to audit the records of any licensee to verify  






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          completion of the continuing education requirement.

        7)Exempts from the mandatory continuing education requirements:

           a)   Licensed individuals at least 70 or older who have been  
             licensed in good standing for a minimum of 25 consecutive  
             years.

           b)   Inactive licensed investigators, defined as a licensee who  
             has informed the DCA that he or she will not be performing  
             activities that require licensure, and who does not perform  
             such activities.  Permits an inactive licensed investigator  
             to become an active licensee upon payment of the regular  
             renewal fee and submitting to the DCA a signed statement of  
             completion of the specified 12 hours of required continuing  
             education.

           c)   Peace officers, as specified.

        8)Requires the DCA to develop a procedure for approving CE  
          providers (CEPs), convene a review panel to consult with to  
          assist the DCA in its consideration and approval of CEPs and  
          course content, and develop criteria for CEPs and CE courses.

        9)Requires CEPs to obtain DCA approval to provide required CE  
          courses, submit a course description and curriculum vitae of  
          course instructors for review and approval by  DCA, maintain a  
          record of course sign-in forms, sign-out forms, student  
          enrollment, copies of certificates of completion, and course  
          outlines for a period of five years, and agree to audits  
          performed by DCA.

        10)Authorizes the DCA Director to revoke or deny the right of a  
          CEP to offer the required PI CE courses for failure to comply  
          with any of these requirements.

        11)Specifies that CEPs in good standing with courses approved by  
          the California Commission on Peace Officers Standards and  
          Training may offer CE without approval from DCA.

        12)Specifies that a renewal applicant, or an inactive licensee  
          applying for an active license, who is required to sign a  
          statement attesting to their compliance with the continuing  
          education requirements of this bill, who knowingly signs a false  






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          statement is subject to a civil penalty of up to $10,000 and  
          license suspension for up to one year.  Any public prosecutor  
          may bring the civil action.

        13)Increases the maximum limit for initial license fees from $175  
          to $195 and for renewal license fees from $125 to $145.

        FISCAL EFFECT:  Unknown.  This bill has been keyed "fiscal" by  
        Legislative Counsel.
        
        
        COMMENTS:
        
         1.Note  :  Last Year's  SB 1282  (Margett).  This bill is a  
          reintroduction of last year's 
        SB 1282 (Margett) which was one of an unprecedented number of  
          bills that were vetoed by the Governor citing the delay in  
          passing the Budget.  That bill passed this Committee on a 9-0  
          vote. 

        2.Purpose.  This bill is sponsored by  California Association of  
          Licensed Investigators  (CALI).  According to the bill Sponsor  
          many laws have changed since a majority of PIs received their  
          license. The Author states that this bill will help make certain  
          that PIs have received training on the new laws which affect  
          their profession.  This bill seeks to ensure the public has some  
          assurances that a PI knows relevant laws and regulations.  

        3.Background.  Currently there are over 25 classes of professions  
          or occupations licensed by the various licensing boards and  
          bureaus within the DCA that are required to complete CE courses  
          related to their profession.  However, private investigators  
          currently are not required to take any CE as a condition of  
          license renewal.  Requiring mandatory CE for license renewal is  
          justified when it is considered necessary in order to maintain a  
          licensee's minimal satisfactory level of competence in his or  
          her occupation.

        4.Prior Legislation.  In addition to last year's SB 1282  
          (Margett), in 2001, the Assembly versions of  AB 761  (Maddox,  
          Chapter 309, Statutes of 2001) contained provisions similar to  
          this bill that would have required 14 hours of mandatory CE for  
          renewal of a PI license.  That bill was amended in this  
          Committee to delete those requirements and instead enact the  






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          current statutory requirements that the Bureau consider  
          including privacy and ethics questions on the PI licensing exam,  
          requiring a separate professional ethics exam, and requiring  
          applicants for new licenses to complete a professional ethics  
          course.  To date the Bureau has not utilized these provisions.

        5.Other Pending Legislation.   SB 741  (Maldonado), which will also  
          be heard at this hearing, would extend the BSIS authority to  
          regulate proprietary security guards.  

        6.Committee Fee Bill Worksheet.  Included with this analysis is a  
          "Fee Background Information Questionnaire" which is to be  
          completed by the Author's office and the Board requesting a fee  
          increase.  This Questionnaire is required by the Committee to  
          justify any fee increases and provide background information on  
          requested fee increases by the boards under DCA.  The  
          Questionnaire is to include fund condition statements displaying  
          five years of actual and five years of projected expenditures  
          and revenues with (a) current statutory maximum fee amounts and  
          (b) proposed statutory maximum fee amounts.  It also is to  
          include a schedule of fee revenue by various fee "categories"  
          displaying five years of actual and five years of projected  
          revenue based on (a) current fees and (b) proposed fees and  
          includes the workload (e.g., number of licensees) and fee  
          charged per category.  It is to provide a schedule displaying  
          two years of expenditures by program component, such as  
          application review, examination, enforcement, administration and  
          other licensing activities for  each  licensing category.  It is  
          to provide a table of comparison of existing and proposed fees  
          which includes the 

        percentage by which the fee will change.  Lastly, it should  
          provide the history for the past 10 years of legislative fee  
          increase authorizations. 

        The attached Worksheet shows that the proposed fee will increase  
          the license and renewal fee by $20 each.  The authorized initial  
          licensure fee would increase from $175 to $195 and authorized  
          license renewal fee will increase from $125 to $145.  This  
          constitutes an 11.5% and a 16% fee increase respectively.  The  
          worksheet states that the fee will cover all operating expenses  
          associated with the CE program.  The worksheet shows an estimate  
          that the fee increase would generate $100,000 a year in revenue.  
           The current fees have been set at $175 and $125 since 1993.   






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          The worksheet showed five years of projected expenditures and  
          revenues.  

        7.Arguments in Support.  The  California Association of Licensed  
          Investigators, Inc  ., (CALI) forwarded 130+ letters from various  
          private investigation corporations, individual licensed  
          investigators, and lawyers expressing support of this bill.  The  
          backers argue that:  (1) many new laws affecting PIs have been  
          passed; (2) there is currently no law mandating CE for PIs; and,  
          (3) PIs should be educated in the new laws.  

          According to CALI and other supporters, there are significant legal  
          changes which cover, among other things, the protection of sensitive  
          personal information, prohibitions against false impersonation to  
          obtain information, and measures to prevent identity theft.  Since  
          most PIs received their licenses prior to the passage of these new  
          laws, CALI argues that CE is needed to make investigators aware of  
          ongoing evolution of the law.  CALI argues that CE on the law and  
          other topics, as required by this bill, will result in better  
          trained investigators, benefiting the public by giving it some  
          measure of assurance that the PI knows relevant laws.  

        8.Arguments in Opposition.   Capitol City Investigations  and  
          numerous individual private investigators state their opposition  
          to SB 202 due to poor economic timing, no recognition of law  
          enforcement experience or training, there is no recognized  
          problem being addressed, the bill might cause revenue  
          short-falls, similar bills were vetoed in the past,  and general  
          problems in DCA.  The opposition also expresses concern that  
          there are conflict of interest issues with the Sponsors of the  
          bill. 

        9.Policy Considerations.  
         
            a.   Is there a need for the proposed mandatory CE?   The  
             arguments for the bill focus on informing PIs so that they  
             will be knowledgeable on the current laws regarding  
             confidentiality of certain information, ethical standards,  
             and current information.  However, the proponents have not  
             clearly documented the harm that consumers encounter without  
             a mandatory continuing education requirement for licensees.   
             In addition, the Bureau already has authority under current  
             law enacted by AB 761, in 2001, to consider including  
             additional requirements regarding privacy laws and  






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             professional ethics for PI licensing if needed.   Why is that  
             authority insufficient?

           A mandatory continuing education requirement would generate  
             unspecified costs to licensees and generate corresponding  
             revenues to continuing education providers, which typically  
             are educational institutions and professional associations.   
             The Bureau would also incur costs in establishing continuing  
             education standards and tracking licensee compliance.  What  
             is the demonstrated need to mandate continuing education?   
             The proponents should address the justification for, cost,  
             and availability of such continuing education before going  
             forward with a continuing education proposal.

           It may be useful to draw a distinction between continuing  
             education that is undertaken voluntarily by conscientious,  
             motivated practitioners, versus continuing education that is  
             undertaken involuntarily by unwilling or unmotivated  
             practitioners.  While continuing education seems intuitively  
             to be highly beneficial to licensees and the consumer public,  
             there is no empirical evidence that demonstrates a clear  
             conjunction between a continuing education mandate and  
             improved practitioner competence.

            b.   Added workload on the Bureau.   The bill imposes a number  
             of requirements on the Bureau to implement and then  
             administer the proposed new CE program.  Whether the proposed  
             increases in the initial and renewal license fees will be  
             sufficient to cover the added workload on the Bureau is  
             unknown at this time.  The Sponsor points out that the  
             proposed CE program is modeled after that used by the State  
             Bar for attorneys and attempts to minimize the burden on the  
             Bureau by simply having the licensees and the CE providers  
             maintain documentation of completion of the required CE, and  
             having the licensees submit a signed statement attesting that  
             they have completed the required CE.  Then the Bureau would  
             only need to perform spot checks to assure the integrity of  
             the program.
            
           c.   Costs associated with Implementing the Program.   Although  
             the Sponsor claims that the increase in fees associated with  
             licensure will cover any additional costs to the Bureau,  
             opponents claim the opposite; the new fees will not cover the  
             added expenditure to the tune of over $100,000.






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           d.   Long-term Licensees are Grandfathered.   This bill has a  
             large carve-out for PIs who are over 70 years in age and have  
             been licensed for over 25 years.  It is
           unclear why this exception is included in the bill and why  
             long-term licensees over 70 with 25 years of licensure would  
             not benefit from the CE.
            
           e.   No Assurances of Quality Education.   Requiring that  
             licensees attend CE does not ensure that they understood the  
             material presented.  This bill does not mandate any  
             certification or testing.     
         
        10.Sponsor's Comments Regarding the Policy Issues Raised in the  
          Analysis.  The bill sponsor,  CALI  , responded to the policy  
          issues raised in the analysis, specifically regarding (1)  
          documented harm, (2) the insufficiency of current authority,  
          demonstrated need, justification of cost and availability,  
          mandatory v. voluntary education, the conjunction between  
          mandated education and improved competence, the fees and whether  
          they will cover costs, grandfathering, and quality assurances.  

          The sponsor argues that there are numerous documented cases of  
          harm to consumers which CE might have prevented and that these  
          cases illustrate a demonstrated need for CE and thus justifies  
          this bill being passed.  The sponsor also argued that the  
          current regulatory powers have not been implemented by the  
          agency and that the agency is not authorized to require CE  
          regarding address legal updates or privacy rights and only  
          applies to new licensees.  The sponsor also argues that the  
          "carve out" for PIs over 70 with 25 years of licensure "are  
          retired or do not work directly with consumers."  The sponsor  
          also argues that the DCA will ensure quality education.

        

        SUPPORT AND OPPOSITION:
        
         Support:   

        California Association of Licensed Investigators (Sponsor)
        Adelanto Committee of Los Angeles
        National Organization for Women, San Fernando Valley/Northeast Los  
          Angeles 






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        Privacy Rights Clearinghouse
        Numerous Individuals

         Opposition:  

        Capitol City Investigations
        Numerous Individuals



        Consultant:G. V. Ayers/Michael Stanley