SB1467 - 562R

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

Section 1. Section 28-5105, Arizona Revised Statutes, is amended to read:

START_STATUTE28-5105. Criminal records check; denial of application; immunity from costs; revocation; judicial review

A. Except as provided by subsection B of this section, each applicant who owns twenty percent or more of an entity, each partner or stockholder who owns twenty percent or more of an entity and each person who is an employee of an authorized third party who has access to personal information as defined in section 28-440 obtained from the department or a customer of the department or monies collected on behalf of this state, and who seeks authorization or certification, or both, pursuant to this article shall provide:

1. A full set of fingerprints to the department of transportation for the purpose of obtaining a state and federal criminal records check pursuant to section 41-1750 and Public Law 92-544. The department of public safety may exchange this fingerprint data with the federal bureau of investigation.

2. A nonrefundable fee to be paid to the department of public safety for the criminal records check.

B. Each employee of an authorized third party who conducts vehicle inspections on behalf of this state shall provide:

2. A nonrefundable fee to be paid to the department of public safety for the criminal records check.

C. The director may deny an application for authorization or certification, or both, if any individual included in the application has either:

1. Made a misrepresentation or misstatement in the application to conceal a matter that would cause the application to be denied.

2. Been convicted of fraud or an auto-related felony in any state, territory or possession of the United States or any foreign country within the ten years immediately preceding the date the criminal records check is complete.

3. Been convicted of a felony, other than a felony described in paragraph 2 of this subsection, in a state, territory or possession of the United States or a foreign country within the five years immediately preceding the date the criminal records check is complete.

4. Violated a rule or policy of the department.

5. Been involved in any activity that the director determines to be inappropriate in relation to the authority granted.

D. The director may approve an application for provisional authorization or certification, or both, pending completion of the criminal records check if the applicant meets all other requirements of this article. The director may revoke a provisional authorization or certification, or both, for a violation of this title. A provisional authorization or certification, or both, is valid unless revoked by the director or until the applicant receives approval or denial of the application for authorization or certification, or both.

E. Within twenty days of completion of the criminal records check, the director shall approve or deny the application. If the application is denied, the director shall advise the applicant in writing of the denial and the grounds for denial. The department or its employees are not liable for any costs incurred by an applicant seeking authorization or certification, or both, under this article.

F. Within thirty days after receipt of the notice of denial, the applicant may petition the director in writing for a hearing on the application pursuant to section 28-5107.

G. If the authorized third party adds a partner or stockholder who owns twenty percent or more of the entity and who was not included in the criminal records check on a prior application, the authorized third party shall notify the department within thirty days of the change.

H. At the time of notification pursuant to subsection G of this section, the third party shall submit to the department of transportation an application and, if applicable, a full set of fingerprints and the fee to be paid to the department of public safety for a criminal records check. On completion of the investigation if the individual added or changed by the authorized third party is found to be ineligible pursuant to subsection C of this section, the director of the department of transportation shall advise the authorized third party and the individual in writing of the grounds for the action and that the authorization will be revoked unless the individual is removed from the position.

I. The requirement for a criminal records check does not apply to an applicant who is seeking third-party authorization and who is:

1. A department, agency or political subdivision of this state.

2. A court of this state.

3. A law enforcement agency or department of this state.

4. A financial institution or enterprise under the jurisdiction of the department of insurance and financial institutions or a federal monetary authority.

5. The federal government or any of its agencies.

6. A motor vehicle dealer that is licensed and bonded by the department of transportation or a state organization of licensed and bonded motor vehicle dealers.

7. A manufacturer, importer, factory branch or distributor licensed by the department of transportation.

8. An insurer under the jurisdiction of the department of insurance and financial institutions.

9. An owner or registrant of a fleet of one hundred or more vehicles.

10. A public utility.

11. A tribal government.

12. An employer or association that has at least five hundred employees or members.

J. The director shall revoke an authorization or certification, or both, if the third party does not meet the standards prescribed by this section. The director shall advise the third party in writing of the revocation and the grounds for the revocation. Within thirty days after receipt of the notice of revocation, the third party may do either of the following:

1. Petition the director in writing for a hearing on the revocation pursuant to section 28-5107.

2. Seek judicial review of the director's revocation. If the court finds for the third party, the court may reinstate the authorization or certification, or both, and award any damages and attorney fees.

J. K. For the purposes of this section, personal information does not include information received pursuant to section 28-872.END_STATUTE

Sec. 2. Section 28-5107, Arizona Revised Statutes, is amended to read:

START_STATUTE28-5107. Application denial; authorization or certification revocation; hearing; judicial review; appeal

A. The director may deny an application for third party authorization or certification, or both, under this article and shall advise the applicant in writing within twenty days of the denial and the grounds for the denial if the director determines that any of the following applies:

1. The applicant is not eligible for third party authorization or certification, or both, under this article.

2. The application is not made in good faith.

3. The application contains a material misrepresentation or misstatement.

4. The applicant has not met the requirements of law.

B. An applicant A person who is aggrieved by the denial of an application or a revocation of an authorization or certification, or both, may do either of the following:

1. Make a written request to the department for a hearing on the application or revocation within thirty days after service of the notice of denial or the notice of revocation.

2. seek judicial review of the director's denial or revocation. If the court finds for the person, the court may grant or reinstate the authorization or certification, or both, and award any damages and attorney fees.

c. If the applicant person does not request a hearing or seek judicial review pursuant to subsection D of this section within thirty days, the denial or revocation is final.

C. d. If the applicant person requests a hearing, the director shall give written notice to the applicant person to appear at a hearing to show cause why the denial of the applicant's application or the revocation of the authorization or certification, or both, should not be upheld. After consideration of the evidence presented at the hearing, the director shall serve notice in writing to the applicant of the director's findings and order. A timely request for a hearing stays the denial of the application or the revocation of the authorization or certification, or both.

D. e. If the application is denied or the authorization or certification, or both, are revoked, the applicant person may appeal the decision pursuant to title 12, chapter 7, article 6. END_STATUTE

Sec. 3. Section 28-5108, Arizona Revised Statutes, is amended to read:

START_STATUTE28-5108. Cancellation or suspension of authorization or certification; hearing; appeal; judicial review

A. The director may suspend or cancel an authorization or certification, or both, granted pursuant to this article if the director determines that the third party or certificate holder has done any of the following:

1. Made a material misrepresentation or misstatement in the application for authorization or certification.

2. Violated a law of this state.

3. Violated a rule or policy adopted by the department.

4. Failed to keep and maintain records required by this article.

5. Allowed an unauthorized person to engage in any business pursuant to this article.

6. Been involved in any activity that the director determines to be inappropriate in relation to the authority granted.

B. The director may suspend or cancel an authorization or certification, or both, granted pursuant to this chapter if the director determines that an individual included in the application for authorization or certification:

1. Made a misrepresentation, omission or misstatement in the application to conceal a matter that may cause the application to be denied.

2. Has been convicted of fraud or an auto related auto-related felony in a state, territory or possession of the United States or a foreign country within the ten years immediately preceding the date a criminal records check is complete.

3. Has been convicted of a felony, other than a felony described in paragraph 2 of this subsection, in a state, territory or possession of the United States or a foreign country within the five years immediately preceding the date a criminal records check is complete.

C. The director shall suspend or cancel an authorization of a third party granted pursuant to this article if the director determines that the third party failed to maintain the bond required pursuant to section 28-5104.

D. If the director has reasonable grounds to believe that a certificate holder or other person employed by an authorized third party has committed a serious violation, the director may order a summary suspension of the third party's authorization granted pursuant to this chapter pending formal suspension or cancellation proceedings. For the purposes of this subsection, "serious violation" means:

1. Title or registration fraud.

2. Driver license or identification license fraud.

3. Improper disclosure of personal information as defined in section 28-440.

4. Bribery.

5. Theft.

E. On determining that grounds for suspension or cancellation of an authorization or certification, or both, exist, the director shall give written notice to the third party or certificate holder to appear at a hearing before the director to show cause why the authorization or certification should not be suspended or canceled.

F. After consideration of the evidence presented at the hearing, the director shall serve notice of the director's finding and order to the third party or certificate holder.

G. Except as provided in subsection H of this section, if a third party authorization or a certification is suspended or canceled, the third party or certificate holder may appeal the decision pursuant to title 12, chapter 7, article 6.

H. A person may forgo an administrative appeal and seek judicial review of the director's denial, suspension or cancellation of the person's application, authorization or certification. If the court finds for the person, the court may grant or reinstate the authorization or certification, or both, and award any damages and attorney fees. END_STATUTE