BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON
          BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
                              Senator Jerry Hill, Chair
                                2015 - 2016  Regular 

          Bill No:            AB 921          Hearing Date:    June 22,  
          2015
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          |Author:   |Jones                                                 |
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          |Version:  |April 27, 2015                                        |
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          |Urgency:  |No                     |Fiscal:    |Yes              |
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          |Consultant|Janelle Miyashiro                                     |
          |:         |                                                      |
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           Subject:  Private investigators: Disciplinary Review Committee.


          SUMMARY:  Establishes a Private Investigator Disciplinary Review  
          Committee (DRC) within the Bureau of Security and Investigative  
          Services (Bureau) to review a request of a licensee to contest  
          an administrative fine or to appeal the denial of a license.   
          Authorizes an applicant applying for an original license or  
          renewal of a license as a private investigator to put his or her  
          email address on the application at his or her discretion.

          Existing law:
          
          1) Provides for the licensure and regulation of private  
             investigators (PIs) by the Bureau of Security and  
             Investigative Services (Bureau) in the Department of Consumer  
             Affairs (DCA) under the Private Investigator Act (Act), which  
             requires the Director of the DCA (Director) to administer and  
             enforce the Act.  (Business and Professions Code (BPC) §§  
             7512 et. seq.)


          2) Defines a "private investigator" as a person, firm, company,  
             association, partnership, or corporation, other than an  
             insurance adjuster, who engages in business to protect  
             persons or makes investigations for the purpose of obtaining  
             information with reference to:









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              a)    Crime or wrong-doings against the United States of  
                America.


              b)    The identity habits, conduct, business, honesty,  
                associations, acts, character, etc. of any person.


              c)    The cause or responsibility for fires, libels, losses,  
                accidents, damage, or injury to persons or property.


              d)    The location, disposition, or recovery of lost or  
                stolen property.


              e)    The securing of evidence to be used in court or  
                investigating committee.     (BPC § 7521)


          3) Requires the Director to furnish, at least once every two  
             years, one copy of the current licensing law, rules, and  
             regulations to every licensed business under this Act without  
             charge.  (BPC § 7519)


          4) Authorizes the Director to deny, suspend, or revoke a license  
             if he or she determines that the licensee violated specified  
             provisions in the Act. (BPC § 7561.1)


          5) 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)


          6) Establishes procedures for hearings of denials, suspensions,  
             or revocations of a license in accordance with those in the  
             Government Code.  (BPC § 7518)










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          7) 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)


          8) 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) Establishes a Private Investigator Disciplinary Review  
             Committee (DRC) within the Bureau to review a request from a  
             licensee to contest an administrative fine or appeal the  
             denial of a license.

              a)    The members of the DRC will consist of five members  
                appointed by the Governor: three members actively engaged  
                in the business of licensed private investigation and two  
                public members.  Each member of the DRC will be appointed  
                for a term of four years.

              b)    Requires a licensee or applicant for a license, to  
                request review by written notice to the DRC within 30 days  
                of the issuance of a citation and requires the DRC to  
                notify the appellant within 30 days of the review of the  
                DRC's decision.

              c)    Requires the DRC to meet every 60 days or as  
                frequently required and authorizes members of the DRC to  
                be paid per diem and reimbursed for actual travel  
                expenses.

          2) Authorizes an applicant applying for licensure or renewal as  
             a private investigator to put his or her email address on the  
             application at his or her discretion.
          
          
          FISCAL  
          EFFECT:  This bill is keyed "fiscal" by Legislative Council.   
          According to the Assembly Appropriations analysis written on May  








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          6, 2015, this bill will result in ongoing costs of approximately  
          $47,000 annually (special funds) to the Bureau for a half-time  
          staff services analyst (SSA) position and four hearings per year  
          associated with the new DRC.

          
          COMMENTS:
          
          1. Purpose.  This bill is sponsored by the  California  
             Association of Licensed Investigators  (CALI).  According to  
             the Author, "Under current law, licensed private  
             investigators who wish to contest the assessment of an  
             administrative fine or to appeal a denial of a license must  
             embark upon a process that can take more than a year to  
             obtain a final resolution.  This legislation would amend the  
             Private Investigator Act to require the establishment of a  
             DRC?The option to opt in voluntarily to a DRC could save the  
             licensee time as the matter could be resolved more quickly."

          2. Background.  A private investigator is an individual, who  
             amongst other duties, investigates crimes, investigates the  
             identity, business, occupation, character, etc., of a person,  
             investigates the location of lost or stolen property,  
             investigates the cause of fires, losses, accidents, damage or  
             injury, or secures evidence for use in court.  Private  
             investigators may protect persons only if such services are  
             incidental to an investigation; they may not protect  
             property.  According to Bureau's 2014 sunset report, there  
             are around 9,885 PI licensees currently registered in  
             California.  

          3. Disciplinary Review Committees (DRCs).  Current law provides  
             for three DRCs within the Bureau.  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 Bureau'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 Bureau'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;  








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             therefore, the Bureau states that it is not feasible to  
             establish an annual calendar for DRC meetings.

             The Bureau 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 Bureau does not post draft or final  
             minutes for its DRC, or webcast DRC meetings.

             The Private Security Services Act establishes two DRCs, one  
             in northern California and one in southern California and the  
             Alarm Company Operator 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 assess administrative  
             fines.  All DRCs are comprised of five members appointed by  
             the Governor, three of whom are professional members actively  
             engaged in their respective businesses and two of whom are  
             public members.  DRC meetings are scheduled depending on the  
             number of appeals received and are conducted in accordance  
             with the Open Meeting Act.
             
             The Private Security Services Act and the Alarm Company  
             Operator Act have different processes for their respective  
             DRCs.  For Private Security DRCs, 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 the Alarm Company  
             Operator DRC, applicants and licensees are required to file  
             their appeal with a DRC first, and are then provided the  
             ability to appeal a DRC decision through the administrative  
             process.  The Collateral Recovery DRC in this bill is modeled  
             after the Alarm Company DRC.

             When applicants and licensees file their appeals to a DRC,  
             Bureau staff schedules the appeal review for an upcoming  
             meeting and mail the respondent information about the meeting  
             and what to expect.  Approximately two weeks before a  
             scheduled DRC meeting, Bureau staff provides each DRC member  








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             with a case file for each appeal to be heard during the  
             meeting.  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 Bureau'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 Bureau  
             staff mail the applicant or licensee the DRC's decision on  
             their appeal within 30 days.

             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 Bureau.  In the Bureau's sunset report, it  
             noted, "To maximize the efficiency of its disciplinary  
             activities, the [Bureau] 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 [Bureau] licensees request an appeal  
             of their denials, suspensions, or imposition of fines through  
             DRC[s]."

             The Bureau 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 Bureau, an appellant is generally  
             scheduled for hearing within 30 to 60 days. According to the  
             Bureau, this approach has resulted in no ongoing backlogs.

             Over the last three fiscal years:

                 The Private Security DRC had an annual average of 20  
               meetings and an average caseload of 35 appeals per meeting.  
                The Alarm Company Operator DRC held an annual average of 3  
               meetings and had an average caseload of 9 appeals per  
               meeting.  

                 The annual cost for the Southern California Private  








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               Security DRC, which had 11 meetings, was $27,820.32, and  
               for the Northern California Private Security DRC, which had  
               10 meetings, was $12,700.00.  The annual cost for the Alarm  
               Company Operator DRC, which had four meetings, was  
               $7,978.69.  This does not include staff time.  

                 The Private Security DRC overturned an average of 203  
               decisions and upheld an average of 345 decisions.  The  
               Alarm Company DRC overturned an average of five decisions  
               and upheld an average seven decisions. 

                 The Private Security DRC received an annual average of  
               12 citation appeals. The Alarm Company DRC received one  
               citation appeal (FY 2013-14). 

                 There was an annual average of 11 requests for formal  
               administrative appeals for citations and fines for all BSIS  
               professions. 

            By way of comparison, for licensees under the Collateral  
            Recovery Act, over the last three fiscal years: 

                 There were 38 citations and 1 appeal, for an annual  
               average of 13 citations and less than one appeal each year.

                 There were 58 license denials and 17 appeals, for an  
               annual average of 19-20 denials and 5-6 appeals each year.   


                 According to BSIS, the average time for appeals of a  
               license denial under the Act is 570 days.  Based on the  
               past three fiscal years, the overall average time for cases  
               to be considered through the administrative hearing process  
               is 290-300 days.  

          1. Email Addresses.  Under current law, an applicant for a new  
             or renewed PI license   is not authorized to provide an email  
             address on his or her application.  The current application  
             for a new or renewed PI license does not allow for the  
             addition of an email address, as there is no space for an  
             applicant to fill one in.  As email has become an almost  
             primary means of communication, the industry feels that this  
             should be reflected in an update to the license application.  
             The Author asserts that it is in the best interest of the  








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             consumer that an applicant for an original or renewed private  
             investigator license be allowed to provide the state with a  
             business email address that will be available as a public  
             record along with other specific information regarding  
             individual licensees.  This bill will allow an applicant for  
             a new or renewed PI license to use a business email address  
             on his or her application at his or her discretion.

          2. Prior/Related Legislation.  AB 281  (Gallagher, 2015) of the  
             current legislative session would establish a disciplinary  
             review committee for licensed repossessors.
             (  Status  : This bill was passed out of the Senate Business  
             Professions and Economic Development Committee on June 15,  
             2015 and is waiting for a hearing date in the Senate  
             Appropriations Committee.)

              AB 409  (Yee, Chapter 381, Statutes of 2006) provided  
             licensees under the Board of Barbering and Cosmetology with  
             appeal rights to the DRC established by the Board.  

             AB 3291  (McPherson, Chapter 1285, Statutes of 1994)  
             established the Private Security Disciplinary Review  
             Committee.

          3. Arguments in Support.  Writing in support of the bill, the  
              California Association of Licensed Investigators (CALI)   
             states, "AB 921 would amend the Private Investigator Act in  
             the Business and Professions Code to require the  
             establishment of a disciplinary review committee (DRC)?  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?In addition, AB 921 would amend Section 7525.1? This  
             provision has not been revised to allow for an email address  
             be provided.  It is in the best interest of the consumer that  
             an applicant for an original or renewed licensed private  
             investigator license provides the state with a business email  
             address that will be available as a public record along with  
             other specific information regarding individual licensees."

          4. Recommended Author's Amendments.  The Private Investigator  








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             DRC that this bill will establish is modeled after the  
             existing Alarm Company DRC.  However, there are three  
             sections in the BPC for the Alarm Company DRC that are not  
             included in this bill.  For clarity in defining the functions  
             and protocols of the Private Investigator DRC and consistency  
             with the already existing Alarm Company DRC, the Author  
             should amend and include the following sections under the  
             Private Investigator Act:
             
             Section XXXX. (a) The Private Investigator Disciplinary  
             Review Committee shall perform the following functions:
             (1) Affirm, rescind, or modify all appealed decisions  
             concerning administrative fines assessed by the bureau  
             against a person licensed with the department under this  
             chapter.
             (2) Affirm, rescind, or modify all appealed decisions  
             concerning denial, revocation, or suspension of licenses, and  
             certificates, registrations, or permits issued by the bureau,  
             except denials or suspensions ordered by the director in  
             accordance with Chapter 5 (commencing with Section 11500) of  
             Division 3 of Title 2 of the Government Code.
             (b) The Private Investigator Disciplinary Review Committee  
             may grant a probationary license, certificate, registration,  
             or permit with respect to the appealed decisions described in  
             subdivision (a).

             Section XXXX. If the appellant does not request a hearing  
             within 30 days; the review committee's decision shall become  
             final.
             (1) A licensee may request a hearing in accordance with  
             Chapter 5 (commencing with Section 11500) of Part 1 of  
             Division 3 of Title 2 of the Government Code if he or she  
             contests an assessment of an administrative fine, or to  
             appeal a denial, suspension, or revocation. A hearing may  
             also be requested if the appellant disagrees with the  
             decision made by the Alarm Company Operator Disciplinary  
             Review Committee.
             (2) A request for a hearing shall be by written notice to the  
             bureau within 30 days of the issuance of the decision by the  
             review committee. A hearing pursuant to this subdivision  
             shall be available only after a review by the disciplinary  
             review committee.

             Section XXXX.  The disciplinary review committee shall be  








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             provided all evidence used by the bureau in reaching its  
             decision prior to hearing an appeal.

          
          SUPPORT AND OPPOSITION:
          
           Support:  California Association of Licensed Investigators  
          (Sponsor)

           Opposition:  None on file as of June 16, 2015.


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