BILL ANALYSIS Ó AB 921 Page 1 Date of Hearing: April 14, 2015 ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS Susan Bonilla, Chair AB 921 (Jones) - As Introduced February 26, 2015 SUBJECT: Private investigators: Disciplinary Review Committee. SUMMARY: Establishes a Private Investigator Disciplinary Review Committee (DRC), to which a licensed private investigator, under the Bureau of Security and Investigative Services (BSIS), may appeal the assessment of an administrative fine and to which a person denied a license to work as a private investigator may appeal the denial. EXISTING LAW 1)Establishes the Private Investigator Act (Act), which provides for the licensure and regulation of private investigators by the BSIS, within the Department of Consumer Affairs (DCA), and requires the director of Consumer Affairs to administer and enforce the act. (Business and Professions Code (BPC) § 7512-7573) 2)Authorizes the director to deny, suspend, or revoke a license if the director determines, among other things, that the licensee has violated any provision of the act. (BPC § 7561.1) AB 921 Page 2 3)Authorizes the director to impose a civil penalty of no greater than $500 instead of suspending or revoking a license issued under the Act for the violation of specified provisions if the director determines that the imposition of the civil penalty better serves the purposes of the Act. (BPC § 7563) 4)Establishes two Private Security DRCs, one in northern California and one in southern California, which licensees have the option of using to review administrative fines and licensure decisions, except as specified. (BPC §§7581.1-7581.5) 5)Establishes an Alarm Company Operator DRC, which licensees have the option of using to review administrative fines and licensure decisions, except as specified. (BPC §§ 7591.17-7591.20) THIS BILL 1)Requires the Governor to appoint a Private Investigator DRC, and allows the Governor to remove any member of the committee for misconduct, incompetency, or neglect of duty. 2)Requires the DRC to consist of three members actively engaged in the business of a licensed private investigator and two public members. The public members shall not be licensees or registrants, or engage in any business or profession in which any part of the fees, compensation, or revenue thereof, is derived from any licensee. 3)Requires the DRC to meet every 60 days, or more or less frequently as may be required. The members shall be paid per AB 921 Page 3 diem pursuant to BPC § 103 and shall be reimbursed for actual travel expenses. The members shall be appointed for a term of four years. 4)Authorizes a person licensed with the BSIS to appeal the assessment of an administrative fine to the committee and authorizes a person denied a license under the act to appeal the denial of a license, unless the denial of a license is ordered by the director in a formal administrative hearing. 5)Requires a request for an appeal to the DRC to be made in writing to the BSIS within 30 days of the assessment of an administrative fine or denial of a license. 6)Requires that, following review of the appeal, the appellant shall be notified in writing, by regular mail, within 30 days of the committee's decision. 7)Authorizes the appellant to request a formal administrative hearing to appeal a DRC decision. A request for such a hearing shall be made by written notice to the DCA within 30 days following notice of the committee's decision. FISCAL EFFECT: Unknown. This bill is keyed fiscal by the Legislative Counsel. COMMENTS 1)Purpose. This bill is sponsored by the California Association of Licensed Investigators. According to the author, this bill "would amend the Private Investigator Act in the Business and Professions Code to require the establishment of a AB 921 Page 4 disciplinary review committee [DRC], to which a licensed private investigator could voluntarily opt into, to contest the assessment of an administrative fine or to appeal a denial of a license." "This bill would save the [DCA] money, and would also save licensees time and money if they chose to opt-in to the new disciplinary review committee to resolve their situation." 2)Background. Current law provides for three DRCs within the BSIS. The Private Security Services Act establishes two DRCs, one in Northern California and one in Southern California, and the Alarm Company Act establishes one DRC. The DRCs provide their respective applicants and licensees an alternate path to consider appeals of the BSIS's decisions to deny, suspend, or revoke licenses, or assessments of administrative fines. The purpose of the DRC is to consider appeals from applicants and licensees on the BSIS's decisions to issue a fine, or deny, suspend, or revoke a license. The scheduling of the DRC is dependent on the number of appeals received; therefore, BSIS states is not feasible to establish an annual calendar for DRC meetings. The BSIS posts notices and agendas for its meetings of the Private Security DRCs and Alarm Company DRC in accordance with the noticing requirement prescribed by the Bagley-Keene Open Meeting Act. Currently, meeting notices and agendas remain on the website indefinitely. However, older information is archived by year to ensure current information is accessible. The BSIS does not post draft or final minutes for its DRC, or webcast DRC meetings. AB 921 Page 5 This bill seeks to establish a similar DRC for private investigators. However, this bill does not include language permitting the appeal of a firearm permit. Private Security DRCs. The two Private Security DRCs are each comprised of five members. The members are appointed by the Governor and may be removed for misconduct, incompetency, or neglect of duty. Three members are industry representatives and two are public members. Of the three industry members, one member must be actively engaged in business as a licensed private patrol operator, one member must be actively engaged in business as a firearm training facility, and one member must be actively engaged as a security guard. The Private Security DRCs are authorized to hear appeals relating to the BSIS's denial, suspension, or revocation of a license and the imposition of fines from: a) Security guard applicants and registrants; b) Private patrol operator applicants and licensees; c) Proprietary private security officer applicants and registrants; d) Firearm training facilities; e) Instructor applicants and certificate holders; and, f) Baton training facilities, instructor applicants, and AB 921 Page 6 certificate holders. Those who are authorized to obtain a BSIS-issued firearm permit may also appeal the BSIS's denial or suspension of the firearm permit to a DRC if the denial or suspension is not attributable to a DOJ firearm prohibition. Alarm Company Operator DRC. The Alarm Company Operator DRC consists of three members who are actively engaged in business as a licensed alarm company operator and two public members. The members are appointed by the Governor and serve at the Governor's pleasure. The Alarm Company DRC is authorized to hear appeals relating to the BSIS's application denials, license suspension, and the imposition of fines from alarm company operator applicants and licensees, alarm company operator qualified manager applicants and certificate holders, and alarm agent applicants and registrants. These individuals may also appeal the BSIS's denial or suspension of a BSIS-issued firearm permit to the DRC if the denial or suspension is not attributable to a DOJ firearm prohibition. 3)DRC Process. The Private Security Services Act and the Alarm Company Operator Act have different processes. For private security, applicants and licensees have the option of filing an appeal with the DRC or through the administrative hearing process. If the applicant or licensee requests the appeal to be heard first by the DRC, the applicant or licensee may still appeal a DRC decision through the administrative process. For alarm companies, applicants and licensees are required to file their appeal with a DRC first, and then provide the applicant or licensee the authority to appeal a DRC decision AB 921 Page 7 through the administrative process. When applicants and licensees file their appeals to a DRC, BSIS staff schedule the appeal review for an upcoming meeting and mail the respondent information about the meeting and what to expect when attending the DRC meeting. Approximately two weeks before a scheduled DRC meeting, BSIS staff provides each DRC member with a case file for each appeal to be heard during the meeting. Each file contains the pertinent information the BSIS considered in reaching its decision. DRC meeting proceedings are carried out in accordance with the committee's adopted Rules of Order. During the hearing, the applicant or licensee is afforded the opportunity to present his or her case. He or she may be represented by an attorney and may bring witnesses as character references or observers of the incident resulting in the BSIS's action. DRC members ask questions to clarify issues related to the case to obtain the information needed to make a decision on the appeal. The average hearing time per person is 15-30 minutes. The BSIS staff mail the applicant or licensee the DRC's decision on their appeal within 30 days. 4)DRC Statistics. In March of this year, the Assembly Committee on Business and Professions and the Senate Committee on Business, Professions and Economic Development held a joint sunset oversight hearing to review several of the boards and bureaus under the DCA, including the BSIS. In the BSIS's sunset report, it noted, "To maximize the AB 921 Page 8 efficiency of its disciplinary activities, the [BSIS] ensures that those licensees eligible to have their appeals heard by a Bureau [DRC] are properly notified of this option in a timely manner. Each year, approximately 900 [BSIS] licensees request an appeal of their denials, suspensions, or imposition of fines through DRC[s]." The BSIS notes that the number of pending appeal cases changes depending on the fluctuating quantity of incoming appeal requests from applicants and licensees. It also states that it has been able to address a high number of pending appeals by scheduling two-day hearings and meeting monthly to accommodate the number of appeals. Once an appeal is received by the BSIS, an appellant is generally scheduled for hearing within 30 to 60 days. According to the BSIS, this approach has resulted in no ongoing backlogs. In each of the last three FYs: 1) The private security DRC held an average of 20 meetings and had an average caseload of 35 appeals per meeting. The alarm DRC held an average of 3 meetings and had an average caseload of 9 appeals per meeting. 2) The private security DRC overturned an average of 203 decisions and upheld an average of 345 decisions. An average of 505 appellants did not appear for their appeal (skewed because in FY 2011 - 12 there were 607 no shows). The alarm DRC overturned an average of 5 decisions and upheld an average 7 decisions. An average of 10 appellants did not appear. 3) The private security DRC received an average of 12 citation and fine appeals. The alarm DRC received 1 AB 921 Page 9 citation appeal (FY 2013 - 14). 4) There were an average of 11 requests for formal administrative appeals for citations and fines for all BSIS professions. The BSIS also notes that, the overall average time for cases to be considered through the administrative hearing process is 290-300 days. By way of comparison, for private investigators, in each of the last three FYs: a) There were 8 citations and 0 appeals-an average of 3 citations and 0 appeals. b) There 7 license denials and 1 appeal-an annual average of 2 - 3 license denials and 0 - 1 appeal (which took 354 days). The number of BSIS licenses and permits at the time of the DCA 2015 snapshot: a) Private security - 292,120. b) Alarm Company - 24,625. c) Private Investigators - 9981. d) Total permits - 157,319. AB 921 Page 10 Costs. The annual costs of the DRC meetings are: a) Southern California private security DRC (11 meetings) - $27,820.32. b) Northern California private security DRC (10 meetings) -$12,700.00. c) Alarm company DRC (4 meetings) - $7,978.69. 1)Current Related Legislation. AB 281 (Gallagher) of the current legislative session, would establish a DRC within the Collateral Recovery Act for licensed repossessors. STATUS: This bill is pending in the Assembly Committee on Business and Professions. 2)Prior Related Legislation. AB 409 (Yee) Chapter 381, Statutes of 2006, provides a licensee under the Board of Barbering and Cosmetology with appeal rights to the disciplinary review committee established by the board and would require the board to reinstate the license upon the licensee's completion of all probationary terms and conditions. ARGUMENTS IN SUPPORT The California Association of Licensed Investigators writes in support, "This option could save the licensee time as the matter could be resolved more quickly. This option could save the Department of Consumer Affairs [DCA] time and expense as a DRC decision accepted by the licensee would not proceed through the more expensive adjudicatory route. A licensee who disagrees with a DRC decision would be able to return to the current process. AB 921 Page 11 At the recent Sunset Review Hearing of the Bureau of Security and Investigative Services [BSIS] within DCA, conducted by this committee together with the Senate Committee on Business, Professions and Economic Development, BSIS noted the value of the DRCs that currently exist for security guards and alarm companies. For these reasons, CALI supports AB 921 and we look forward to working with you to ensure its passage." ARGUMENTS IN OPPOSITION None on file. SUGGESTED COMMITTEE AMENDMENT The process surrounding the review of a DRC decision overturning a BSIS fine or denial is unclear. The author may wish to amend the bill to specify the details of this process. SUGGESTED TECHNICAL AMENDMENTS On page 2, line 9, strike "of" and after "business" insert: or REGISTERED SUPPORT / OPPOSITION: Support AB 921 Page 12 California Association of Licensed Investigators (sponsors) Opposition None on file. Analysis Prepared by:Vincent Chee / B. & P. / (916) 319-3301