HB2440 - 511R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 32-2406, Arizona Revised Statutes, is amended to read:

START_STATUTE32-2406. Hearings and special meetings

A. The board shall hold hearings at a time and place determined by the director. The board may hold special meetings the chairman determines necessary to carry out the functions of the board.

B. A quorum consists of three members. END_STATUTE

Sec. 2. Section 32-2409, Arizona Revised Statutes, is amended to read:

START_STATUTE32-2409. Exemptions

This chapter does not apply to:

1. An officer or employee of the federal government, this state or a political subdivision of this state, while engaged in the official performance of the officer's or employee's duties.

2. A person, firm or corporation, or an employee of a person, firm or corporation, engaged in the business of obtaining and furnishing financial and related personal information for others, including a consumer reporting agency as defined in the fair credit reporting act (15 United States Code section 1681a), if the person, firm or corporation does not engage in other investigative research that is an investigative consumer report as defined in the fair credit reporting act (15 United States Code section 1681a) and if the employee is not employed or connected with any private investigator or private investigator's business.

3. A practicing attorney involved in a case for which the attorney has been retained or a person employed under an employee‑employer relationship with a practicing attorney, in the employee's performance of duties related to a case for which the attorney has been retained.

4. A collection agency licensed in this state, or its employee while acting within the scope of employment, while making an investigation incidental to the business of the agency, including an investigation of the location of a debtor or the debtor's property if the contract with an assignor creditor is for the collection of claims owed or due or asserted to be owed or due or its equivalent.

5. Insurance brokers producers, adjusters and agents licensed by this state in performing their duties in connection with insurance transacted by them.

6. The legal owner of personal property that has been sold under a sales agreement in making investigations relating to the sales agreement.

7. A member of the news media and its employees when engaged in obtaining information for the purpose of disseminating news to the public.

8. Public service corporations engaged in transmitting messages, furnishing public telegraph or telephone service or investigating the use or misuse of their equipment and facilities or the use or misuse of the equipment and facilities of any connecting telecommunications company.

9. Private process servers who are duly registered and performing their duties pursuant to the Arizona rules of civil procedure.

10. A person, firm or corporation, or an employee of a person, firm or corporation, that, for any consideration, observes consumer purchases of products or services in the public environments of a business establishment for the purpose of evaluating customer service, operational procedures, cleanliness, product quality and availability if all of the following apply:

(a) The information is obtained from questionnaires that the business establishment approves in advance of use.

(b) The obtained information is used for employee training or incentives.

(d) The business establishment does not use a single evaluation as the only basis for an employee's termination from employment.

11. A person or entity that is performing duties pursuant to statute and that is certified or registered by the supreme court. END_STATUTE

Sec. 3. Section 32-2457, Arizona Revised Statutes, is amended to read:

START_STATUTE32-2457. Grounds for disciplinary action; emergency summary suspension; judicial review

A. The following constitute grounds for which disciplinary action specified in subsection B of this section may be taken against a licensee or registrant or, if the licensee is other than an individual, against the licensee's qualifying party or any of its associates, directors or managers:

1. Fraud or wilful misrepresentation in applying for an original license or registration or the renewal of an existing license or registration.

2. Using any letterhead, advertisement or other printed matter in any manner or representing that the licensee, associate, registrant or employee of the licensee is an instrumentality of the federal government, a state or any political subdivision of a state.

3. Using a name that is different from that under which the licensee, associate, registrant or employee of the licensee is currently licensed for any advertisement, solicitation or contract to secure business unless the name is an authorized fictitious name.

4. Impersonating, permitting or aiding and abetting an employee to impersonate a law enforcement officer or employee of the United States, any state or a political subdivision of a state.

5. Knowingly violating, or advising, encouraging or assisting the violation of, any statute, court order, warrant or injunction in the course of a business regulated under this chapter.

6. Falsifying fingerprints, photographs or other documents while operating under this chapter.

7. Conviction of a felony.

8. Conviction of any act involving a weapon pursuant to section 13‑3102.

9. Conviction of any act of personal violence or force against any person or conviction of threatening to commit any act of personal violence or force against any person.

10. Soliciting business for an attorney in return for compensation.

11. Conviction of any act constituting dishonesty or fraud.

12. Being on parole, on community supervision, on work furlough, on home arrest, on release on any other basis or named in an outstanding arrest warrant.

13. Serving a term of probation pursuant to a conviction for any act of personal violence or domestic violence as defined in section 13‑3601 or an offense that has the same elements as a domestic violence offense listed in section 13‑3601, subsection A.

14. Committing or knowingly permitting any employee to commit any violation of this chapter or rules adopted pursuant to this chapter.

15. Wilfully failing or refusing to render to a client services or a report as agreed between the parties and for which compensation has been paid or tendered in accordance with the agreement of the parties.

16. The unauthorized release of information acquired on behalf of a client by a licensee, associate or registrant as a result of activities regulated under this chapter.

17. Failing or refusing to cooperate with or refusing access to an authorized representative of the department engaged in an official investigation pursuant to this chapter.

18. Employing or contracting with any unregistered or improperly registered person or unlicensed or improperly licensed person or agency to conduct activities regulated under this chapter if the licensure or registration status was known or could have been ascertained by reasonable inquiry.

19. Permitting, authorizing, aiding or in any way assisting a registered employee to conduct services as described in this chapter on an independent contractor basis and not under the authority of the licensed agency.

20. Failing to maintain in full force and effect workers' compensation insurance, if applicable.

21. Conducting private investigation services regulated by this chapter on an expired, revoked or suspended license or registration.

22. Accepting employment, contracting or in any way engaging in employment that has an adverse impact on investigations being conducted on behalf of clients.

23. Advertising in a false, deceptive or misleading manner.

24. Failing to display on request the identification card issued by the department as required under section 32‑2451, subsection B.

25. Committing any act of unprofessional conduct.

26. Being arrested for any offense that is listed in this chapter and that would disqualify the licensee, registrant or qualifying party or any of its associates, directors or managers from obtaining a license or registration.

27. Failing to maintain all qualifications as prescribed by sections 32-2422 and 32-2441, as applicable.

B. On completion of an investigation, the director:

1. May dismiss the case.

2. May take emergency action.

3. May issue a letter of concern, if applicable.

4. May forward the findings to the board for review and possible disciplinary action.

5. Shall place all records, evidence, findings and conclusions and any other information pertinent to the investigation in the public records section of the file maintained at the department.

6. Shall suspend the license or registration of a person who is arrested for an offense that is listed in this chapter and that would disqualify the person from obtaining a license or registration.

C. A letter of concern is a public document and may be used in future disciplinary actions against a licensee.

D. If the department finds, based on its investigation, that the public health, safety or welfare requires emergency action, the director may order a summary suspension of a license or registration pending proceedings for revocation or other action. If the director issues this order, the department shall serve the licensee or registrant with a written notice of complaint and formal hearing, setting forth the charges made against the licensee or registrant and the licensee's or registrant's right to a formal hearing before the board pursuant to title 41, chapter 6, article 10.

E. If the department finds, based on its investigation, that a violation of subsection A of this section occurred, a hearing by the board may be scheduled pursuant to title 41, chapter 6, article 10. The department shall send notice of the hearing by certified mail, return receipt requested, to the licensee's or registrant's last known address in the department's records.

F. Based on information the board receives during a hearing pursuant to title 41, chapter 6, article 10, it may recommend to the director that the director:

1. Dismiss the complaint if the board believes it is without merit.

2. Fix a period and terms of probation best adapted to protect the public health and safety and to rehabilitate or educate the licensee or registrant.

3. Place Suspend the license or registration on suspension for a period of not more than twelve months.

4. Revoke the license or registration.

G. On a finding by the board and review and concurrence by the director that a licensee or registrant committed a violation of subsection A of this section, the probation, suspension or revocation applies to all licenses or registrations held by a licensee or registrant under this chapter and chapter 26 of this title.

H. Except as provided in section 41‑1092.08, subsection H, a person may appeal a final administrative decision made pursuant to this section to the superior court pursuant to title 12, chapter 7, article 6.END_STATUTE

Sec. 4. Title 32, chapter 24, article 4, Arizona Revised Statutes, is amended by adding section 32-2462, to read:

START_STATUTE32-2462. Notice of arrest

Within forty-eight hours after being arrested, a private investigator or a qualifying party shall notify the employer agency of the arrest. Within twenty-four hours after receiving notice of the arrest, the employer agency shall notify the department of the arrest.END_STATUTE

Sec. 5. Section 32-2616, Arizona Revised Statutes, is amended to read:

START_STATUTE32-2616. Qualifying party; responsibilities

A. An applicant for an agency license shall have a qualifying party.

B. For a sole proprietorship, the qualifying party shall be the agency licensee.

C. For a partnership, corporation or limited liability company, the qualifying party shall be the individual who is liable for managing the agency. All other partners or corporate officers shall register as associates pursuant to article 3 of this chapter.

D. If the qualifying party lives outside this state, the qualifying party shall designate a resident manager who is a manager of the agency, who maintains full‑time legal residency in this state and who meets the requirements of sections 32‑2612 and 32‑2613.

E. If required, the qualifying party shall maintain workers' compensation insurance and liability insurance in effect as prescribed by section 32-2613, subsection C.END_STATUTE

Sec. 6. Section 32-2636, Arizona Revised Statutes, is amended to read:

START_STATUTE32-2636. Grounds for disciplinary action; emergency summary suspension; judicial review

A. The following constitute grounds for disciplinary action against a licensee or registrant, or if the licensee is other than an individual, against its qualifying party or any of its associates, directors or managers:

1. Using any letterhead, advertisement or other printed matter to represent, or in any other manner representing, that the licensee, registrant, or qualifying party or its associate, director or manager is an instrumentality of the federal government or any state or political subdivision of a state.

2. Using a name that is different from that under which the licensee, registrant, or qualifying party or its associate, director or manager is currently licensed or registered for any advertisement, solicitation or contract to secure business under this chapter unless the name is an authorized fictitious name.

3. Falsifying fingerprints, photographs or other documents while operating pursuant to this chapter.

4. Impersonating, or permitting or aiding and abetting an employee to impersonate, a law enforcement officer or employee of the United States or any state or political subdivision of a state.

5. Knowingly violating, or advising, encouraging or assisting in the violation of, any statute, court order, warrant or injunction in the course of business as a licensee or registrant under this chapter.

6. Committing or knowingly permitting any employee to commit any violation of this chapter or rules adopted pursuant to this chapter.

7. Committing an act of misconduct involving a weapon pursuant to section 13‑3102.

8. Conviction of a felony.

9. Conviction of any act of personal violence or force against any person or conviction of threatening to commit any act of personal violence or force against any person.

10. Fraud or wilful misrepresentation in applying for an original license or registration or the renewal of an existing license or registration.

11. Soliciting business for an attorney in return for compensation.

12. Conviction of any act constituting fraud.

13. Being on parole, on community supervision, on work furlough, on home arrest, on release on any other basis or named in an outstanding arrest warrant.

14. Serving a term of probation pursuant to a conviction for any act of personal violence or domestic violence as defined in section 13‑3601 or an offense that has the same elements as a domestic violence offense listed in section 13‑3601, subsection A.

15. Wilfully failing or refusing to render client services or a report as agreed between the parties and for which compensation has been paid or tendered pursuant to the agreement of the parties.

16. The unauthorized release of information acquired on behalf of a client by a licensee, associate or registrant as a result of activities regulated under this chapter.

17. Failing or refusing to cooperate with or refusing access to an authorized representative of the department engaged in an official investigation pursuant to this chapter.

20. Failing to maintain in full force and effect workers' compensation insurance, if applicable, or liability insurance as prescribed by section 32‑2613, subsection C.

21. Conducting security guard services regulated by this chapter on an expired, revoked or suspended license or registration.

22. Accepting employment, contracting or in any way engaging in employment that has an adverse impact on security guard services being conducted on behalf of clients.

23. Advertising in a false, deceptive or misleading manner.

24. Failing to display on request the identification card issued by the department pursuant to section 32‑2624.

25. Committing any act of unprofessional conduct.

26. Being arrested for any offense listed in this chapter that would disqualify the licensee, registrant, or qualifying party or any of its associates, directors or managers from obtaining a license or registration.

27. Failing to maintain all qualifications as prescribed by sections 32-2612 and 32-2622, as applicable.

B. An officer, director, associate, partner, qualifying party, employee or manager of the holder of an agency license issued pursuant to this chapter who is found in violation of this chapter shall be denied the privilege of operating under such a license. The remaining officers, directors, associates, partners, employees or managers of such licensee who are innocent of such violations may carry on the business.

C. Any person aggrieved by a decision of the director may request a hearing pursuant to title 41, chapter 6, article 10. Except as provided in section 41‑1092.08, subsection H, final decisions of the director are subject to judicial review pursuant to title 12, chapter 7, article 6.

D. On completion of an investigation, the director:

1. May dismiss the case.

2. May take emergency action.

3. May issue a letter of concern, if applicable.

4. May forward the findings to the board for review and possible disciplinary action.

5. Shall place all records, evidence, findings and conclusions and any other information pertinent to the investigation in the public records section of the file maintained at the department.

6. Shall suspend the license or registration of a person who is arrested for an offense that is listed in this chapter and that would disqualify the person from obtaining a license or registration.

E. A letter of concern is a public document and may be used in future disciplinary actions against a licensee or registrant.

F. If the department finds, based on its investigation, that the public health, safety or welfare requires emergency action, the director may order a summary suspension of a license or registration pending proceedings for revocation or other action. If the director issues this order, the department shall serve the licensee or registrant with a written notice of complaint and formal hearing, setting forth the charges made against the licensee or registrant and the licensee's or registrant's right to a formal hearing before the board pursuant to title 41, chapter 6, article 10.

G. If the department finds, based on its investigation, that a violation of subsection A of this section occurred, a hearing by the board may be scheduled pursuant to title 41, chapter 6, article 10. Notice of the hearing shall be sent by certified mail, return receipt requested, to the licensee's or registrant's last known address in the department's files.

H. Based on information the board receives during a hearing pursuant to title 41, chapter 6, article 10, it may recommend to the director that the director:

1. Dismiss the complaint if the board believes it is without merit.

2. Fix a period and terms of probation best adapted to protect the public health and safety and to rehabilitate or educate the licensee or registrant.

3. Place Suspend the license or registration on suspension for a period of not more than twelve months.

4. Revoke the license or registration.

I. The director shall review the records of a finding by the board involving a disciplinary action and may affirm, reverse, adopt, modify, supplement, amend or reject the recommendation of the board. On a finding by the board and review and concurrence by the director that a licensee or registrant committed a violation of subsection A of this section, the probation, suspension or revocation applies to all licenses or registrations held by a licensee or registrant under chapter 24 of this title and this chapter. END_STATUTE