BILL ANALYSIS
SB 202
Page 1
Date of Hearing: June 30, 2009
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Mary Hayashi, Chair
SB 202 (Harman) - As Amended: June 15, 2009
SENATE VOTE : 33-0
SUBJECT : Private investigators: continuing education.
SUMMARY : Requires private investigators (PIs), as a condition
of license renewal, to complete 12 hours of continuing education
(CE) in privacy rights, professional ethics, recent legal
developments, and other subjects related to the profession, and
makes other regulatory changes, as specified. Specifically,
this bill :
1)Requires licensed PIs, beginning January 1, 2013, as a
condition of license renewal, to complete 12 hours of CE as
follows: two hours in the subject of privacy rights, two
hours in the subject of professional ethics, two hours on the
subject of recent legal developments relating to PIs, and six
hours on any subject relating to PIs.
2)Requires licensed PIs whose license is subject to renewal
between January 1, 2012, and January 1, 2013, to complete six
hours of CE, as approved by DCA, in order to renew his or her
license, and of these, two hours shall be on the subject of
privacy rights, two hours shall be on the subject of
professional ethics, and two hours shall be on the subject of
recent legal developments relating to private investigators.
3)Exempts a licensed PI who is a retired peace officer for less
than a year from CE requirements.
4)Requires a licensed PI who is a retired peace officer for more
than a year to complete six hours of CE, as approved by DCA,
in order to renew his or her license, and of these, two hours
shall be on the subject of privacy rights, two hours shall be
on the subject of professional ethics, and two hours shall be
on the subject of recent legal developments relating to
private investigators.
5)Requires a licensee to submit to the Department of Consumer
Affairs (DCA) a signed statement attesting that the licensee
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has completed the specified CE requirements with a license
renewal application.
6)Requires a licensee to maintain copies of certificates
demonstrating completion of the required CE courses for five
years.
7)Authorizes DCA to suspend (up to 60 days) or revoke the
license of a PI for his/her failure to comply with the CE
requirements. The DCA shall have the right to audit the
records of any licensee to verify completion of the CE
requirement.
8)Exempts from the mandatory CE requirements:
a) Licensed individuals at least 70 years old whose license
has been in good standing for a minimum of 25 consecutive
years; and,
b) Inactive licensed investigators.
9)Defines an "inactive licensed investigator" as an individual
who is licensed and has informed DCA that he/she will not be
performing activities that require licensure, and does not
perform such activities.
10)Allows an inactive licensed PI to become active upon
submitting to the DCA a signed statement that he/she has
completed the specified CE requirements and paying a renewal
fee.
11)Requires DCA to develop a procedure for approving continuing
education providers (CEPs), convene a review panel to consult
with DCA in its consideration and approval of CEPs and course
content, and develop criteria for CEPs and CE courses. The
review panel shall include representatives of CEPS and
professional associations of licensed PIs.
12)Requires CEPs to obtain DCA approval to provide required CE
courses.
13)CEPs shall:
a) Obtain approval from DCA prior to offering a CE course
to licensed PIs;
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b) Submit to DCA a course description, certificate, and
curriculum vitae of course instructors for review and
approval;
c) 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,
d) Agree to audits performed by DCA.
14)Authorizes DCA 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.
15)Authorizes CEPs approved by and in good standing with the
State Bar to provide mandatory continuing legal education, to
offer CE to licensed PIs without approval from DCA.
16)Authorizes CEPs approved by and in good standing with the
Commission on Peace Officer Standards and Training, to offer
CE to licensed PIs without approval from DCA.
17)Requires DCA to establish and charge CEPs a fee in an amount
not to exceed DCA's direct costs in implementing PI CE
requirements and developing criteria for CEPs and course
content.
18)Specifies that any applicant who knowingly signs a false
statement asserting completion of CE requirements is subject
to a civil action punishable by a fine up to $10,000. In
addition, DCA may suspend the PI's license for up to a year,
and revoke the license if the CE requirements remain unmet.
Any public prosecutor may bring the civil action. Requires
DCA to advise the applicants of this penalty in the
application documents.
19)Increases the maximum amounts charged for an initial PI
license from $175 to $195 and for a PI renewal license from
$125 to $145.
EXISTING LAW :
1)Provides for the licensure and regulation of PIs by the Bureau
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of Security and Investigative Services (Bureau) within DCA.
2)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 criminal justice and two and one-half 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 repossess, or arson investigator for a public fire
suppression agency;
d) Pass a two-hour multiple choice examination covering
laws and regulations, terminology, civil and criminal
liability, evidence handling, undercover investigations and
surveillance; and,
e) Pay an application and examination fee not to exceed
$50, and a license fee not to exceed $175.
1)Provides that a PI license is valid for two years and requires
the licensee to pay a renewal fee of not more than $125.
2)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
expended by the Bureau for the purpose of carrying out the
provisions of the PI licensing law.
3)Requires the Bureau to consider:
a) When creating or updating the PI licensing exam,
including privacy and professional ethics questions,
including a separate professional ethics exam, and
requiring current licensees to take the separate exam if it
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is appropriate; and,
b) Requiring initial license applicants to submit proof of
satisfactory completion of a course in professional ethics,
as specified.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of the bill . According to the author's office, "SB 202
would require licensed investigators to obtain 12 hours of CE
every two years. SB 202 would also increase the biennial
licensure fee by $20, an amount necessary to generate $220,000
annually to completely cover the costs of administering the new
requirements. Even though California PIs are licensed and
regulated by the state DCA Bureau, there is no current
requirement providing the opportunity for investigators to learn
of newly-enacted laws, nor is there a compendium of applicable
laws for investigators to educate themselves. Consequently,
many of the almost 10,000 licensed investigators may not be
aware of the latest developments and legal requirements
applicable to the industry."
Background . Currently, PIs are not required to take any CE as a
condition for license renewal, but can elect to take voluntary
CE courses offered by associations, businesses, and
institutions. Requiring mandatory CE as a condition 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.
According to the sponsor, the Bureau has the regulatory and
enforcement authority provided to it by the Private
Investigators Act (Act) in the California Business and
Professions Code (BPC). While many enacted laws relating to
privacy protection are contained in other codes, including the
Civil Code, the Bureau's authority does not extend to those
laws. The passage of recent legislation to protect personal
information, such as restrictions on false impersonation,
disclosure of medical records, and disclosure of financial
information, are located in codes outside the Act and BPC. The
sponsors claim that the personal privacy laws described are
general laws, making it difficult for PIs to track and keep up
with new regulations because they are found outside of the Act
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and BPC. Therefore, consumer complaints concerning an alleged
violation of those laws is neither monitored nor enforced by the
Bureau. Instead, such concerns would be referred to the
appropriate regulatory authority, such as the California Office
of Information Security and Privacy Protection.
The sponsors contend that CE on privacy rights, professional
ethics, and recent legal developments are necessary because "PIs
are entrusted with the personal information of consumers on all
sides of an issue, in identify theft, in sexual harassment,
workplace discrimination and other workplace investigations, in
criminal defense, in workers' compensation fraud and other types
of fraud, in investigating civil torts and surveillance for all
purposes. The misuse of the personal information can cause
bodily harm, loss of employment, incarceration, monetary losses
and privacy intrusions." The sponsors further add that privacy
and surveillance laws have changed with time and that they also
change when law enforcement and military officers transition
into the role of a private citizen working as a PI.
In addition, the sponsor claims that SB 202 is a preventative
measure and may have prevented the publicized accounts of PI
misconduct, including: the 2005 Hewlett-Packard spying scandal
in which PIs illegally obtained confidential phone records, the
2007 federal grand jury indictment of 10 PIs for identity theft
and false impersonation, and the 2007 incident where a PI
impersonated a mental health worker and claimed to be the
victim's confidante. In the last case, the California Supreme
Court ruled that prima facie evidence for a tort case existed.
The sponsors provided the following examples of CEPs that PIs
can use to take CE in this bill: distance learning,
individuals, firms, associations, company training,
institutions, mandatory CE credit providers, and Peace Officer
Standard and Training programs.
The Bureau licenses approximately 10,000 PIs. The largest state
PI association is the California Association of Licensed
Investigators, Inc. (CALI), which has approximately 1870 members
and is sponsoring this bill. Another state PI association,
Professional Investigators of California Association (PICA), has
approximately 300 members, and opposes this bill.
Neither DCA nor the Bureau has taken a formal position on this
bill. In addition, it has not been demonstrated how much
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consumer harm has resulted and the necessity for this bill. The
argument that many of the PIs are not affiliated with an
association, where much of the training currently emanates from,
may not justify mandatory CE. Based on the three examples
provided by the sponsors, there have been 12 PIs that have acted
unscrupulously, amounting to 1.2% of the industry. The sponsors
claim that the figure for PI misconduct is underreported because
consumer complaints about privacy and ethics are not tracked by
the Bureau. The Bureau may wish to consider tracking such
complaints.
Supporters contend that recent legislation on privacy rights,
professional ethics, and legal developments, coupled with a few
highly publicized accounts of PI misconduct, demonstrates a need
for CE for PIs. Supporters also argue that this is a preventive
measure that would avoid the significant costs if there was a
misuse of personal information resulting in bodily harm, loss of
employment, incarceration, financial loss, or privacy
intrusions.
Opponents contend that this legislation is unnecessary and that
there is a lack of evidence demonstrating the need for CE for
PIs. Opponents claim that if CE were truly necessary, then such
legislation should be Bureau-sponsored. In addition, opponents
state that mandatory CE is a financial burden. Lastly,
opponents contend that with recent DCA leadership changes and
the recent arrival of the Bureau's Acting Director, that this
may not be the appropriate time for this legislation.
Arguments in support . According to the sponsor, this bill would
"benefit consumers by ensuring that when they hire a
California-licensed PI, the person they hire will be
knowledgeable in the areas of privacy rights, ethics, and
updates in legal and technological developments. It is
important that consumers who hire licensed PIs have some measure
of assurance that the person they engage knows the privacy laws
that apply to the investigation. There are many important
privacy-related laws that have been enacted since the vast
majority of PIs received their licenses. The privacy laws
address the protection of sensitive personal information,
prohibitions against false impersonation, and measures to
prevent identity theft. Neither the preparation for a state
license, nor the testing that is conducted for a license,
address any of these laws. The Act set forth in the BPC
addresses many aspects of an investigation, but it does not
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address the many other laws including the Civil Code.
"Even though California PIs are licensed and regulated by the
state DCA Bureau, there is no current requirement providing the
opportunity for PIs to learn of newly enacted laws, not is there
a compendium of applicable laws for PIs to educate themselves.
Consequently, many of the almost 10,000 licensed investigators
may not be aware of the latest developments and legal
requirements. In addition, a large portion of licensed PIs
qualify for the requisite 6,000 hours of experience through
their law enforcement experience and training that allows them
to take a test. Unfortunately, the law enforcement background
does not prepare an individual to conduct business in the
private sector and the required test does not require the same
education as the CE program would provide."
Arguments in oppose . According to Capitol City Investigations,
"The Bureau presently has authority to require and test in two
of the three mandated subjects contained in SB 202, yet it
hasn't? Data published by the Bureau reflects that for the
four-year period between 2005 and 2008, only one disciplinary
citation was issued to a PI which was in 2005. Four licensed
PIs have been placed on disciplinary probation during this same
four-year period; two in 2005, one in 2006, one in 2007 and none
in 2008. If there's any trend to extrapolate from these
numbers, there has been significant improvement among the
state's 9,993 licensed and professional PIs."
According to the Association of California Investigative
Professionals (A.C.I.P.), they "believe that this bill is a
means to create a financial windfall to CALI, the organization
that drafted this legislation" by increasing CALI's memberships
and by encouraging PIs to attend their conferences and seminars
for CE credits.
According to the owner of the Bermudez Group, Inc, he has "yet
to see a professional/academic study demonstrating that 'PI CE'
is a public policy matter."
Prior Legislation . SB 1282 (Margett) of 2008 was an identical
bill that the Governor vetoed. The Governor vetoed a
substantial number of bills that year with the same message
that, due to the delay in passing the 2008-09 State Budget, he
would only sign bills that were "the highest priority for
California." AB 1282 was vetoed for this reason.
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AB 761 (Maddox), Chapter 309, Statutes of 2001, contained
provisions similar to SB 202 that would have required 14 hours
of mandatory CE for renewal of a PI license. This bill was
amended in the Senate to delete those requirements and instead
enact the current statutory requirements that the Bureau
consider, including privacy and PI licensing exam questions,
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.
Suggested technical amendments . The following amendments are
technical in nature and would clarify the following: CE
requirements for retired peace officers licensed as PIs, the
inclusion of licensed PIs in the review panel that approves CEPs
and CE course content, and fee cap amount that DCA can charge
CEPS.
On page 3, line 26, after "year" insert "and not more than two
years"
On page 5, line 1, after "Notwithstanding" insert "paragraph"
On page 5, line 16, after "include" insert "licensed private
investigators,"
On page 5, line 17, after "CEPS" insert a comma
On page 5, line 24, after "costs" insert "not to exceed twenty
dollars ($20) per course,"
On page 5, line 25, strike out ", in an amount not to exceed"
and insert "to cover"
On page 5, line 27, after "and" insert "course content,"
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of Licensed Investigators, Inc. (sponsor)
Adelanto Committee of Watts
California League of United Latin American Citizens
City of West Hollywood
Chris Reynolds Investigation
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DCW & Associates
Employment Check
F.W. Huntington & Associates, Investigations
Gold River Investigations
Graham McGruer & Associates
Houston Investigative Services
Intelle Quest Investigations
Jean Kyles & Associates
Krout and Schneider, Inc.
League of United Latin American Citizens (LULAC) Councils 3122,
3036 and 3150
Legal Support Investigative Service (LSIS)
Mexican American Political Association, San Fernando Valley
Chapter
National Organization for Women, San Fernando Valley/Northeast
L.A. Chapter
Perrin Investigative Service
Pettinato & Associates
Privacy Rights Clearinghouse
Special Circumstances
Stonewall Democratic Club of Los Angeles
The Titan Group Professional Investigations
Thin Blue Line Investigations
Numerous Individuals
Opposition
1st Investigative Group
Able Trace Investigative Group, Inc.
American Fraud Institute
Apollo Investigative Services
Association of California Investigative Professionals (A.C.I.P.)
AZ Global Investigations
Backtrack Unlimited
Beagle Detectives
Bermudez Group, Inc.
Capital City Investigations
Clarke & Co.
Conaway Investigations
Connors Consulting and Investigation
David L. Warkentine Private Investigations
Douglas W. Dixon & Associates
Drakonx
DRI Private Investigators
Gach & Associates
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Gary L. Ermoian, Investigations
I.S.E. Investigative Services
Janson & Associates
JHRI, Inc.
Moore Research
NFrusteenCompany
Nationwide Investigative Services
P.L. Dalton Company, Inc.
Parkin Security Consultants
Professional Investigators of California Association (PICA)
Rodarte Investigations
San Diego County Investigators Association
SDChilds
Smeaton & Associates
Sterling Investigative Services, Inc.
The Trust
Timothy Friend & Associates
Numerous Individuals
Analysis Prepared by : Joanna Gin / B. & P. / (916) 319-3301