GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

S	2 

SENATE BILL 725
Proposed Committee Substitute PCS1627
State Personnel and State Government Committee Substitute Adopted 5/13/91

Short Title:  Private Investigations Act.	(Public)
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Sponsors:
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Referred to:  
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April 22, 1991

A BILL TO BE ENTITLED
AN ACT TO ESTABLISH THE PRIVATE INVESTIGATIONS REGULATORY ACT.
The General Assembly of North Carolina enacts:
Section 1.  The General Statutes are amended by adding a new Chapter to read:
“Chapter 74E.
"Private Investigations Regulatory Act.
"ARTICLE 1.
"Private Investigations Regulatory Board.
"§ 74E-1.  Title.
This Chapter may be cited as the Private Investigations Regulatory Act.  The purpose of this act is to insure a high level of integrity, competency, professionalism, and performance for the private investigator and counterintelligence businesses and to repeal those portions of all previous acts affecting those businesses.
"§ 74E-2.  License required.
(a)	Except as provided in subsection (b) of this section, effective January 1, 1992, no private person, firm, association, or corporation shall engage in, perform any business as, or in any way represent or hold itself out as engaging in a private investigative or counterintelligence business in this State as defined in G.S. 74E-3, without having first complied with the provisions of this Chapter.  Compliance with the licensing requirements of this Chapter does not relieve any person, firm, association, or corporation from compliance with any other licensing law.
(b)	An individual in possession of a valid private investigator business license, associate private investigator permit, counterintelligence license or counterintelligence permit issued prior to the date of the adoption of this Chapter is not subject to forfeiture of that license or permit by virtue of the enactment of this Chapter, but remains subject to suspension, denial, expiration, or revocation in the same manner as all other licensees under this Chapter in those areas.
(c)	The Private Investigations Regulatory Board may issue an associate private investigator or counterintelligence license provided that the applicant works under the supervision of a licensee and is otherwise qualified to hold such a permit.
"§ 74E-3.  Private investigation and counterintelligence business defined.
(a)	As used in this Chapter, the term ‘private investigation business' means and includes the following:
(1)	The terms ‘private investigator' and ‘private detective' are synonymous and mean any person who accepts payment of any kind for performing the services defined as those performed by a private investigator or private detective, or any other person who agrees to make or makes inquiries or investigations on a contractual basis concerning the following subjects:
a.	Crimes or wrongs done or threatened against the United States or any state or territory of the United States;
b.	The identity, habits, conduct, business, occupation, honesty, integrity, credibility, knowledge, trustworthiness, efficiency, loyalty, activity, movement, affiliation, associations, transactions, acts, reputation, character, or location of any person;
c.	The location, disposition, or recovery of lost or stolen property;
d.	The cause or responsibility for fire, libel loss, accident, damage, or injury to person or to property; or
e.	The obtaining of evidence to be used before any court, board, officer, or investigative committee;
	or who accepts employment to furnish protection of individuals from serious bodily harm or death; or who accepts employment to repossess collateral or property for third parties.
(b)	‘Private investigations business' does not mean:
(1)	Licensed insurance adjusters legally employed as such, who do not engage in other investigative activities unconnected with adjustment of claims against an insurance company.
(2)	An officer or employee of the United States, this State or any political subdivision of either, while such officer or employee is engaged in the performance of his official duties within the course and scope of his employment with the government entity.
(3)	A person engaged exclusively in the business of obtaining and furnishing information as to the financial rating or creditworthiness of persons and a person who provides consumer credit reports in connection with:
a.	Credit transactions involving the consumer on whom the information is to be furnished and involving the extensions of credit to the consumer;
b.	Credit information for employment purposes;
c.	Credit information for the underwriting of insurance involving the consumer;
d.	Credit information in connection with a determination of the consumer's eligibility for a license or other benefit granted by a governmental consumer's eligibility for a license or other benefit granted by a governmental instrumentality required by law to consider an applicant's financial responsibility; or
e.	A legitimate business need for the information in connection with a business transaction involving the consumer.
(4)	An attorney-at-law licensed to practice in the State while engaged in such practice and the paralegals or staff investigators employed by the attorney.
(5)	The legal owner or lienholder or his employees, of personal property which has been sold in a transaction in which a security interest in personal property has been created to secure the sales transaction, who engage in repossession of the property.
(6)	Employees of a person licensed under this Chapter who are employed exclusively as undercover agents.  Undercover agent means an individual hired to perform a specific, time limited, undercover assignment for a licensee and, while performing the assignment, to act as an undercover operative, employee, or independent contractor of a licensee under the supervision of a licensee.
(7)	A person who is engaged in an alarm systems business subject to the provisions of Chapter 74C of the General Statutes.
(8)	A person who obtains or verifies information regarding applicants for employment, with the knowledge and consent of the applicant, and who is:
a.	Engaged in business as a private personnel service as defined in G.S. 95-47.1, or engaged in business as a private employer fee pay personnel service;
b.	Engaged in the business of obtaining or verifying information regarding applicants for employment; or
c.	An employer with whom the applicant has applied for employment.
(9)	A person who conducts efficiency studies.  An efficiency study is an analysis of an employer's business made at the request of the employer, to determine one or more of the following:
a.	The most efficient procedures by which an employee of the business can perform the employer's assigned duties;
b.	The adequacy of an employee's performance of the employer's assigned duties that require interaction with a client or customer of the business.  If a person making an efficiency study observes an instance of theft or another illegal act committed by an employee of the business, the person may report the instance to the employer without violating G.S. 74E-3, but may not make a security survey or inspection.
(10)	Research laboratories and consultants who analyze, test, or in any way apply their expertise to interpreting, evaluating, or analyzing facts or evidence submitted by another in order to determine the cause or effect of physical or psychological occurrences, and give their opinions and findings to the requesting source or to a designee of the requestor.
(11)	A person who works regularly and exclusively as an employee of an employer in connection with the business affairs of that employer only.
(12)	An employee of a security department of a private business that conducts investigations exclusively on matters internal to the business.
(c)	As used in this Chapter, the term counterintelligence business means any person, firm, association, or corporation which, for a fee or other valuable consideration, discovers, locates, disables, disengages or attempts to do so, by electronic, electrical, or mechanical means, any listening or other monitoring equipment surreptitiously placed to gather information concerning any individual, firm, association, or corporation.  Provided that licensed private investigators may conduct limited nontechnically assisted physical searches for such devices, but may not advertise nor hold themselves out to offer counterintelligence services unless they are also licensed in counterintelligence.
"§ 74E-4.  Private investigations board; members; terms; vacancies; compensations; meetings.
(a)	The Private Investigations Regulatory Board is established in the Office of the Attorney General to administer the licensing of and to set educational and training requirements for persons, firms, and corporations engaged in a private investigation or counterintelligence business.
(b)	The Private Investigations Regulatory Board consists of five members who have the powers and responsibilities set forth in this Chapter.  The members of the Private Investigations Regulatory Board are appointed as follows:
(1)	One person appointed by the Attorney General or his designated representative;
(2)	One person appointed by the Governor;
(3)	One person appointed by the General Assembly upon recommendation of the President Pro Tempore of the Senate;
(4)	One person appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives;
(5)	One person appointed by the Board of Directors of the North Carolina Association of Private Investigators from among its members.
(c)	All appointments by the General Assembly are subject to the provisions of G.S. 120-121.  Vacancies in the positions filled by appointments by the General Assembly are filled pursuant to G.S. 120-122.  Persons appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate and the Speaker of the House of Representatives shall be licensees under this Chapter; all other appointees may be licensees.  Board members serve terms of three years.  No person shall serve more than two consecutive terms (six consecutive years) on the Private Investigations Regulatory Board, including years of service prior and subsequent to July 1, 1991.  All appointments must be made by the designated authority within 90 days of enactment of this Chapter.
(d)	Vacancies on the Private Investigations Regulatory Board occurring for any reason shall be filled by the authority making the original appointment of the person causing the vacancy.
(e)	Each member of the Private Investigations Regulatory Board, before assuming the duties of the office, shall take an oath for the faithful performance of his duties.  A Board member may be removed at the pleasure of the authority making the original appointment or by the Board, for misconduct, incompetence, or neglect of duty.
(f)	Members of the Private Investigations Regulatory Board who are State officers or employees shall receive no per diem compensation for serving on the Board, but shall be reimbursed for their expenses in accordance with G.S. 136-6.  Members of the Board who are full-time salaried public officers or employees other than State officers or employees shall receive no per diem compensation for serving on the Board, but shall be reimbursed for their expenses in accordance with G.S. 138-6 in the same manner as State officers or employees.  All other Board members shall receive per diem compensation and reimbursement in accordance with G.S. 93B-5.
(g)	The Private Investigations Regulatory Board shall elect a chairperson, vice-chairperson, and other officers and committee chairpersons from among its members as the Board deems necessary and desirable at its first meeting after July 1 of each year.  The chairperson and vice-chairperson shall be selected by the members of the Board for a term of one year and shall be eligible for reelection.  The Board shall meet at the call of the chairperson or a majority of the members of the Board at such time, date, and location as may be decided upon by a majority of the Board, but not less than monthly in Raleigh.
(h)	All decisions heretofore made by the Private Protective Services Board, established under Chapter 74C, shall remain in full force and effect unless and until repealed or suspended by action of the Private Investigations Regulatory Board established in this Chapter.
"§ 74E-5.  Powers of the Private Investigations Regulatory Board.
(a)	In addition to the powers conferred upon the Private Investigations Regulatory Board elsewhere in this Chapter, the Board may:
(1)	Promulgate rules necessary to carry out and administer the provisions of this Chapter, and may require the submission of reports and information by licensees under this Chapter so long as those reports and that information do not violate the confidentiality due the licensees' clients;
(2)	Establish and require written or oral examinations and training requirements for applicants for licenses, permits, and registration;
(3)	Conduct investigations regarding alleged violations and make evaluations as may be necessary to determine if licensees and associates under this Chapter are complying with the provisions of this Chapter;
(4)	Adopt and amend bylaws, consistent with law, for its internal management and control;
(5)	Approve individual applicants to be licensed or registered according to this Chapter;
(6)	Deny, suspend, or revoke any license, associate permit, or registration issued under this Chapter to any applicant, licensee, permit holder or registrant who fails to satisfy the requirements of this Chapter or the rules established by the Private Investigations Regulatory Board.  Any denial, suspension, or revocation shall be accomplished in accordance with G.S. 150B;
(7)	Issue subpoenas to compel the attendance of witnesses and the production of pertinent books, accounts, records, and documents so long as the confidentiality due the client is not infringed upon.  The district court shall have the power after a hearing to impose punishment pursuant to Article 2 of Chapter 5A of the General Statutes for acts occurring in matters pending before the Private Investigations Regulatory Board that would constitute civil contempt if the acts occurred in an action pending in court.
(8)	Maintain a roster of licensed private investigators to be consulted on a rotating basis for assignment as investigators of the backgrounds of new applicants and the investigation of complaints against investigators;
(9)	Investigate or cause to be investigated any complaints, allegations, or suspicions of wrongdoing or violations of this Chapter involving licensees, applicants, or those suspected of operating in violation of this or other applicable laws.  Those investigations are to be completed by licensees or other investigators approved by the Private Investigations Regulatory Board at a rate of remuneration to be set by the Board.
(b)	The Board may not initiate an investigation into any offense alleged to have occurred more than three years prior to the date the complaint is received.
"§ 74E-6.  Administrator.
(a)	The position of Administrator of the Private Investigations Regulatory Board is created within the Office of the Attorney General.  The Attorney General shall, after consultation with and approval of the Board, appoint an Administrator and such other employees as needed to carry out this Chapter.  All employees shall serve at the pleasure of the Board.
(b)	The Administrator's duties are to administer the directives contained in this Chapter and the rules promulgated by the Private Investigations Regulatory Board to implement this Chapter, and to carry out the administrative duties incident to the functioning of the Board in order to ensure compliance with the law.
(c)	The Private Investigations Regulatory Board shall determine which positions will be staffed full-time, part-time or not at all.
"§ 74E-7.  Applications for license, general requirements.
(a)	Any person, firm, association, or corporation desiring to carry on or engage in the private investigation or counterintelligence business in this State shall make a verified application in writing to the Private Investigations Regulatory Board.
(b)	The application shall include:
(1)	Full name, home address and post office box, and the actual street address of the business of the applicant.
(2)	The name or names under which the applicant intends to do business.
(3)	A statement as to the general nature of the business in which the applicant intends to engage.
(4)	The full name and address of any partners in the business and the principal officers, directors, and business manager, if any.
(5)	The names of not less than three unrelated and disinterested persons as references of whom inquiry can be made as to the character, standing, and reputation of the persons making the application.
(6)	Such other information, evidence, statements, or documents as may be required by the Private Investigations Regulatory Board.
(7)	Evidence of any investigative experience to be considered by the Private Investigations Regulatory Board for potential approval or licensing.
(8)	For associate private investigator permit applications only, a notarized statement signed by the applicant and his employer stating that the associate applicant will at all times work under the supervision of a licensed private investigator subject to the approval of the associate's sponsoring employer.
(9)	Agreement to perform investigative activity at the direction of the Private Investigations Regulatory Board when such investigations include the backgrounds of new applicants and complaints against licensed private investigators and associates only.
(c)	Qualifying agent.  A business entity other than a sole proprietorship shall not do business under this Chapter unless the business entity has in its employ a designated resident qualifying agent who meets the requirements for a license issued under this Chapter and who is, in fact, licensed under this Chapter.  Service upon the registered agent appointed by the business entity of any process, notice, or demand required by or permitted to be served upon the business entity by the Private Investigations Regulatory Board shall be binding upon the business entity and the licensee.  This subsection does not limit or affect the right to serve any process, notice, or demand required or permitted by law to be served upon a business entity in any other manner now or hereafter permitted by law.  For the purpose of this Chapter a qualifying agent means an individual in a management position who is licensed under this Chapter and whose name and address have been registered with the Administrator.
In the event that a qualifying agent upon whom the business entity relies in order to do business ceases to perform his duties as qualifying agent, the business entity shall notify the Administrator within 10 working days.  The business entity must obtain a substitute qualifying agent within 30 days after the former qualifying agent ceases to serve as qualifying agent, unless the Private Investigations Regulatory Board, in its discretion, extends this period, for good cause, for a period of time not to exceed 90 days.
No private investigator or counterintelligence investigator may serve as qualifying agent for more than one private investigation or counterintelligence business.
(d)	Applicant requirements.  Upon receipt of an application, the Private Investigations Regulatory Board shall appoint a licensee or other approved investigator to conduct the background investigation and shall forward to that appointee the appropriate fee as remuneration for the investigative services and then insure that a background investigation is conducted during the course of which the applicant shall be required to show that he meets all requirements for each specific license, permit, or registration under this Chapter, and the following requirements and qualifications hereby made prerequisite to obtaining a license:
(1)	That he be at least 18 years of age.
(2)	That he be of good moral character and temperate habits.  The following shall be prima facie evidence that the applicant does not have good moral character or temperate habits:
a.	Conviction by any local, state, federal, or military court of any felony crime;
b.	Conviction in any jurisdiction of a crime involving the illegal use, carrying, or possession of a firearm;
c.	Conviction of any crime involving the illegal use, possession, sale, manufacture, distribution, or transportation of a controlled substance, drug, narcotic;
d.	Conviction of a crime involving unlawful breaking or entering, burglary, larceny;
e.	Conviction of any offense involving sexual molestation or sexual deviation;
f.	A history of addiction to alcohol or a nonprescribed drug.
Conviction of any crime may be a basis for the denial of any license by the Private Investigations Regulatory Board, provided that, for purposes of this subsection, ‘conviction' means the entry of a plea of guilty or no contest, or a verdict rendered in open court by a judge or jury.
(e)	All applicants shall appear in person before the Private Investigations Regulatory Board and shall be subject to questioning in the Board's presence prior to the approval by the Board of the applicants' license.
(f)	The Private Investigations Regulatory Board may require the applicant to demonstrate his qualifications by oral or written examination or by successful completion of a Board approved training program, or any combination thereof.
(g)	Upon a finding that the application is in proper form, the completion of the background investigation, and the completion of any examination required by the Private Investigations Regulatory Board, the Administrator shall submit to the Board the application and his recommendations.  The Board shall approve or deny the application for a licensee.  Upon approval by the Board, a license will be issued to the applicant upon payment by the applicant of the initial license fee and the required contribution to the Private Investigation Recovery Fund, and upon proof of certificate of liability insurance as required.
(h)	Upon receipt of an application the Administrator may issue a temporary permit to the applicant for a period of 60 days.  That temporary permit may be renewed once at the direction of the Administrator if the application has not been before the Private Investigations Regulatory Board for approval.
"§ 74E-8.  Form of license; term; renewal; posting; branch offices; late fee.
(a)	A license issued under this Chapter shall be in a form as may be determined by the Private Investigations Regulatory Board, and shall state:
(1)	The name of the licensee.
(2)	The name under which the licensee is to operate.
(3)	The number, initial licensing date, and expiration date of the license.  The initial license date is that date upon which the license was first issued and kept continuously in force.
(b)	The license shall be issued for a term of two years.  An associate permit shall be issued for a term of one year.  All licenses must be renewed prior to the expiration of the term of the license.  Following issuance, the license shall at all times be posted in a conspicuous place in the licensee's principal place of business in the State unless for a good cause exempted by the Administrator.  A license issued under this Chapter is not assignable.
(c)	A branch office must be managed by a fully licensed private investigator or counterintelligence investigator.  The license shall be posted at all times in a conspicuous place in the branch office.  Every business covered under the provisions of this Chapter shall file in writing with the Private Investigations Regulatory Board the addresses of each of its branch offices, if any, within 10 working days after the establishment, closing, or changing of the location of any branch office.  The Administrator may, upon the successful completion of an investigation of an application, issue a temporary branch office license pending approval of the application by the Board.  Telephone forwarding devices do not constitute a branch office.
(d)	The Private Investigations Regulatory Board is authorized to set and charge reasonable fees as necessary for licenses, permits and renewals, and to increase or decrease fees as necessary.
(e)	A license or associate permit granted under the provisions of this Chapter may be renewed by the Private Investigations Regulatory Board upon notification of intended renewal, by the licensee or associate to the Administrator, the payment of the proper fee, and, in the case of the licensee, if armed, evidence of a policy of liability insurance as prescribed in G.S. 74E-9.  The renewal shall be finalized before the expiration date of the license or permit.  In no event will the renewal be granted if received more than 60 days after the date of expiration of a license or associate permit.
(f)	Upon notification of approval of his firearms registration application by the Private Investigations Regulatory Board, an applicant must furnish evidence within 30 days that he has obtained the necessary liability insurance required by G.S. 74E-9 and obtain the permit applied for or his application shall lapse.
(g)	A licensed private investigator may supervise no more than 10 associates at any given time.
"§ 74E-9.  Certificate of liability insurance required.
(a)	No firearms registration permit shall be issued under this Chapter unless the applicant files with the Private Investigations Regulatory Board evidence of a policy of liability insurance covering his use of weapons.  The policy must provide for the following minimum coverage; three hundred thousand dollars ($300,000) single limit coverage as a result of the bodily injury or death of a person, or property damage, as a result of the negligent act or acts of the principal insured or his agents while they were operating in the course and scope of his or their employment.
(b)	An insurance carrier shall have the right to cancel a policy of liability insurance upon giving a 30-day notice in writing both to the Private Investigations Regulatory Board and the insured, provided that such cancellation shall not affect any liability which may have accrued prior to cancellation.  The policy of liability shall be approved by the Board as to the policy's form, execution, and terms.
(c)	Licensees and permittees not in possession of a firearms registration permit are not required to obtain a certificate of liability insurance.
(d)	Every licensee required to obtain a certificate of liability insurance under this Chapter shall at all times maintain the certificate on file with the Private Investigations Regulatory Board.  The insurance shall be kept in full force and effect, and the armed registration permit of a licensee who fails to comply shall be automatically suspended.  The armed registration permit shall not be reinstated until an application for the permit, in the form prescribed by the Board, is filed together with the proper insurance certificate.  No cancellation or refusal to renew by an insurer of a licensee under this Chapter shall be effective unless the insurer has given the insured licensee notice of the cancellation or refusal to renew.  Upon termination of insurance coverage for the licensee, the insurer shall give notice to the Administrator of the Board.
"§ 74E-10.  Armed private investigator registration permit.
(a)	Each employer shall submit and sign an application form for the registration of each armed employee to the Board.  This form shall be accompanied by:
(1)	One or more recent head and shoulders color photographs of the applicant of acceptable quality for identification, one inch by one inch in size;
(2)	The applicant's nonrefundable registration fee;
(3)	A statement signed by a certified trainer that the applicant has successfully completed the training requirements established by the Private Investigations Regulatory Board; and
(4)	Proof of liability insurance in an amount not less than three hundred thousand dollars ($300,000).
(b)	The employer of each applicant for registration shall retain a copy of the application in the individual's personnel file in the employer's office.
(c)	Associate private investigators may be armed only with the written consent of their sponsors.
(d)	Registration fees for armed private investigators shall be set by the Board at the minimum amount necessary to carry out the provisions of this Chapter.
(e)	After the Administrator receives a complete application for armed private investigator registration, the Administrator may cause to be made such further investigation of the applicant as deemed necessary.  Any denial of an applicant for registration by the Administrator shall be subject to review by the Board.
(f)	All registered armed private investigators shall carry registration cards.
Upon termination of employment of an armed private investigator, the employer shall return the employee's registration card to the Board within 15 days of the employee's termination.
(g)	Each applicant for renewal of an armed private investigator registration identification card of his employer shall complete a form provided by the Board.  The form shall be submitted not more than 90 days nor less than 30 days prior to expiration of the applicant's current registration and shall be accompanied by:
(1)	Two recent head and shoulders color photographs of the applicant of acceptable quality for identification, one inch by one inch in size;
(2)	The applicant's renewal fee; and
(3)	Proof that the applicant has successfully completed the one-day refresher course including range requalification within 90 days of the renewal date.
The employer of each applicant for a registration renewal shall retain a copy of the application in the individual's personnel file in the employer's office.  Applications for renewal shall be accompanied by a statement signed by a certified trainer that the applicant has successfully completed the training requirements established by the Private Investigations Regulatory Board.
(h)	Applicants for an armed private investigator registration shall complete a basic training course for armed private investigators which consists of a minimum of 40 hours of classroom instruction including:
(1)	Legal limitations on the use of handguns and on the powers and authority of an armed private investigator;
(2)	Familiarity with rules and regulations relating to armed private investigators;
(3)	Range firing procedures, handgun safety and maintenance; and
(4)	Any other topics of armed private investigator training that the Board and the State deem necessary.
"§ 74E-11.  Denial, suspension, or revocation of license, registration, or permit.
(a)	The Private Investigations Regulatory Board may, after compliance with Chapter 150B of the General Statutes, deny, suspend or revoke a license, registration, or permit of an individual who has:
(1)	Knowingly made any false statement or given any false information in connection with any application for a license, registration, or permit, or for the renewal or reinstatement of a license, registration, or permit.
(2)	Violated any provision of this Chapter.
(3)	Violated any rule promulgated by the Private Investigations Regulatory Board pursuant to the authority contained in this Chapter.
(4)	Impersonated, permitted, or aided and abetted any other person to impersonate a law enforcement officer of the United States, this State, any other state, or any political subdivision thereof.
(5)	Engaged in or permitted any employee to engage in a private investigation when not lawfully in possession of a valid license issued under the provisions of this Chapter, except as permitted by G.S. 74E-3.
(6)	Convicted of any illegal drug use, possession, transfer, manufacture, or transportation of any scheduled drug.
(7)	Undertaken to give legal advice or counsel, or to in any way falsely represent that he is representing any attorney, or that he is appearing or will appear as an attorney in any legal proceeding.
(8)	Failed to make the required contribution to the Private Investigation Service Recovery Fund, or failed to maintain the certificate of liability insurance required by this Chapter.
(9)	Violated the firearm provisions set forth in this Chapter or in regulations established by the Private Investigations Regulatory Board.
(10)	Been convicted of any felony crime.
(11)	Failed to notify the Administrator, for a business entity other than a sole proprietorship, licensed under this Chapter of the cessation of employment of the business entity's qualifying agent within the time set forth in this Chapter.
(12)	Failed to obtain a substitute qualifying agent, for a business entity, within 30 days after its qualifying agent has ceased to serve as the business entity's qualifying agent.
(13)	Been judged incompetent by a court having jurisdiction under Chapter 35A or former Chapter 35 of the General Statutes, or committed to a mental health facility for treatment of mental illness, as defined in G.S. 122C-3, by court under G.S. 122C-271.
(14)	Failed or refused to offer a report to a client within 30 days of the client's written request.
(15)	Advertised, solicited business, or engaged in a private investigation service under a name other than the name or names registered with the Private Investigations Regulatory Board.
(16)	Divulged to any person, except as required by law, any confidential information acquired by him except at the direction of the employer or client for whom the information was obtained.  A licensee may divulge to any law enforcement officer, district attorney, or his representative any information the law enforcement officer may require to investigate a criminal offense.
(17)	Demonstrated intemperate habits or lacks good moral character.  The acts that are prima facie evidence of intemperate habits or lack of good moral character under G.S. 74E-7 are prima facie evidence of the same under this subdivision.
(18)	Worn, carried, or displayed in any way any badge purporting to show him as a law enforcement officer of any jurisdiction.
(19)	Failed to comply with G.S. 74E-9 or G.S. 74E-10 before carrying a concealed weapon;
(20)	Engaged in a private investigation service or counterintelligence service while his license was suspended;
(21)	Engaged in a private investigation service or counterintelligence service without having first obtained a proper license, except as permitted by G.S. 74E-3.
(22)	Committed any of the offenses for which a license could be denied under this Chapter.
(b)	The denial, revocation, or suspension of a license, registration, or permit by the Private Investigations Regulatory Board shall be in writing, signed by the Administrator, and shall state the grounds upon which the Board's decision is based.  The person affected may appeal this decision as provided in Chapter 150B of the General Statutes.
(c)	Sworn law enforcement officers except those in a nonpaid volunteer status shall not be issued a license, registration, or permit under this Chapter.  A private investigator, associate private investigator, or counterintelligence investigator with such status shall not carry a concealed weapon unless he has also complied with the provisions of this Chapter.
"§ 74E-12.  Mace.
Private investigators registered under this Chapter may possess and use tear gas (mace)	and like products to the extent allowed under the provisions of G.S. 14-401.6.
"§ 74E-13.  Pocket identification cards.
Upon the issuance of a license or associate permit, a pocket identification card of design, size, and content approved by the Private Investigations Regulatory Board shall be issued by the Board without charge to each licensee or associate.  The holder must have this card in his possession at all times when he is working within the scope of his employment except when that employment involves an undercover assignment. When a licensee or associate to whom a card has been issued terminates his position as a licensee or associate, the card must be surrendered to the Administrator of the Board within 10 working days thereafter.
"§ 74E-14.  Prohibited acts.
It shall be unlawful for anyone not licensed or registered as required by this Chapter to advertise or to hold himself out to be a licensee, or to advertise or to hold himself out to perform services for which a license is required.
"§ 74E-15.  Enforcement.
(a)	The Private Investigations Regulatory Board may apply in its own name to any judge of the Superior Court of the General Court of Justice for an injunction in order to prevent any violation or threatened violation of the provisions of this Chapter.
(b)	Any person, firm, association, or corporation or, their agents and employees violating any of the provisions of this Chapter or knowingly violating any rule promulgated to implement this Chapter, shall be guilty of a misdemeanor and punishable by a fine of up to five hundred dollars ($500.00), by imprisonment for a term not to exceed one year, or both, in the discretion of the court.  The Attorney General, or his representative, shall have concurrent jurisdiction with the district attorneys of this State to prosecute violations of this Chapter.
(c)	In lieu of revocation or suspension of a license or permit under G.S. 74E-11, a civil penalty of not more than two thousand dollars ($2,000) may be assessed by the Private Investigations Regulatory Board against any person or business who violates any provision of this Chapter or any rule of the Board adopted under this Chapter.  In determining the amount of any penalty, the board shall consider the degree and extent of harm caused by the violation.
(d)	Proceedings for the assessment of civil penalties under this section shall be governed by Chapter 150B of the General Statutes.  If the person, firm, association, or corporation assessed a civil penalty fails to pay the penalty to the Private Investigations Regulatory Board, the Board may institute an action in the superior court of the county in which the entity resides or has its principal place of business to recover the unpaid amount of the penalty.  An action to recover a civil penalty under this section shall not relieve any party from any other action prescribed by law.
"§ 74E-16.  Reciprocity; temporary permit.
(a)	To the extent that other states that provide for licensing of private investigators or counterintelligence investigators provide for similar action for citizens of this State, the Private Investigations Regulatory Board, in its discretion may grant a private investigators license to a nonresident who holds a valid private investigators license from another state, upon satisfactory proof furnished to the Board that the standards of licensure in the other states is substantially equivalent to those prevailing in this State.  Applicants shall make application to the Board on the form prescribed by the Board for all applicants, shall comply with the provisions of G.S. 74E-10, and shall pay the fees required of all applicants.
(b)	The Administrator, in his discretion and subject to the approval of the Private Investigations Regulatory Board may issue a temporary permit to a nonresident who has complied with the provisions of this Chapter and who is validly licensed in another state, to engage in private investigative service activity incidental to one specific case originating in another state.  The temporary permit may be issued for a period of no more than 10 days and may be renewed once.  A temporary permit may contain such restrictions as the Board, in its discretion, deems appropriate.
(c)	To the extent that any other state provides for licensing of private investigators and provides for similar action for citizens and licenses of this State, a licensed private investigator or counterintelligence investigator from that state may follow or investigate a case in North Carolina that originates in his home state or jurisdiction of license provided that (i) his duties cause the out-of-state licensed private investigator or counterintelligence investigator to remain in North Carolina for a period of 10 or more consecutive days; and (ii) he reports to the Administrator his name, home and business addresses, state of license, license number, and projected length of stay.  An out-of-state licensed private investigator or counterintelligence investigator who stays in this State for a period of 10 consecutive days or longer must apply for a temporary license and comply with the provisions of this Chapter for all licensees.
"§ 74E-17.  Severability.
If any provision of this Chapter or application thereof to any person or circumstance is for any reason held invalid, such invalidity shall not affect other provisions or applications of the Article which can be given effect without the invalid provision or application, and to this end the provisions of this Chapter are declared to be severable.
"§ 74E-18.  Fees, additional licenses.
(a)	The Private Investigations Regulatory Board may charge reasonable fees as follows:
(1)	A nonrefundable initial application fee not to exceed two hundred dollars ($200.00);
(2)	An annual license or renewal fee not to exceed two hundred dollars ($200.00);
(3)	An annual associate license or renewal fee not to exceed two hundred dollars ($200.00);
(4)	A late renewal fee, to be paid in addition to the renewal fee due, not to exceed one hundred dollars ($100.00);
(5)	An application fee for an armed private investigator registration permit not to exceed fifty dollars ($50.00);
(6)	A new, renewal, replacement, or reissuance fee for an armed private investigator not to exceed thirty dollars ($30.00);
(7)	A branch office license fee not to exceed fifty dollars ($50.00; and
(8)	A nonresident temporary permit fee not to exceed one hundred dollars ($100.00).
(b)	Any person holding a valid license under this Chapter may purchase additional licenses offered under this Chapter, subject to a fee of twenty-five percent (25%) of the ordinary charge for the license under this Chapter, if the applicant meets all the criteria and requirements for the additional license.  The background investigation conducted for approval of the initial license shall be accepted for issuance of the additional license.
"ARTICLE 2.
"Private Investigation Service Recovery Fund.
"§ 74E-20.  Private Investigation Recovery Fund created; payments to Fund; management; use of funds.
(a)	There is hereby created and established a special Fund to be known as the ‘Private Investigation Recovery Fund' (hereafter Fund) which shall be set aside and maintained in the Office of the State Treasurer.  Said Fund shall be used in the manner provided in this Article for the payment of claims where the aggrieved person has suffered a direct monetary loss by reason of certain acts committed by any person licensed under this Chapter.
(b)	Upon enactment of this Chapter, the Private Protective Services Fund established under the provisions of Chapter 74C of the General Statutes shall make payment into the Fund established by this Chapter in an amount equal to the amount contributed into the Chapter 74C Fund by each licensee, trainee, associate, or registrant that licensed or registered as a private investigator or counterintelligence investigator at that time.
(c)	This Article does not limit the authority of the Private Investigations Regulatory Board to take disciplinary action against any licensee or associate under this Chapter, nor shall the repayment in full of obligations to the Fund by any licensee or associate nullify or modify the effect of any other disciplinary proceeding brought under this Chapter.
(d)	In addition to the fees provided for elsewhere in this Chapter, the Private Investigations Regulatory Board shall charge each new applicant for a license or associate permit fifty dollars ($50.00) which shall be deposited into the Fund.  No applicant for any license or permit under this Chapter shall be required to pay into the Fund more than once except as provided for elsewhere by this Chapter.
(e)	The Private Investigations Regulatory Board shall not expend funds for other than payments to aggrieved persons which cause funds to drop below twenty thousand dollars ($20,000).  The State Treasurer shall invest and reinvest the monies of the Fund in a manner as provided by law, provided that sufficient liquidity shall be maintained to satisfy claims authorized by the Board. The proceeds from such investments shall be deposited to the credit of the Fund. The Board in its discretion, may use any and all of the proceeds from such investments for any of the following purposes:
(1)	To advance education and research in the private investigative or counterintelligence fields for the direct benefit of those licensed under the provisions of this Chapter and for the improvement of the industry;
(2)	To underwrite educational seminars, training, and other educational projects for the use and direct benefit generally of licensees and associates.
"§ 74E-21.  Application for payment out of Fund; hearing grounds.
(a)	The Fund shall serve as a guaranty for the obligations of those licensed under this Chapter.  The Fund's liability, as guaranty, is contingent upon a licensee or associate defaulting upon obligation owed to a person by the licensee or associate where said obligation was entered into by the licensee or associate within the scope of the licensee's or associate's employment in providing private investigative services or counterintelligence services.  The Private Investigations Regulatory Board shall be subrogated by the licensee or associate in the amount paid out and the license or associate permit shall be revoked or suspended until such time as full restitution is made to the Fund. The aggrieved party must exhaust all civil remedies against the licensee or associate or the estate of the licensee or associate before seeking reimbursement from the Fund. The following shall be excluded from reimbursable losses:
(1)	Losses of spouses, children, parents, grandparents, siblings, partners, associates, and employees of the licensee or associate causing the losses;
(2)	Losses covered by any bond, surety agreement, or insurance contract to the extent covered thereby;
(3)	Losses that have been otherwise received from or paid by or on behalf of the licensee or associate who defaulted on an obligation.
(b)	An aggrieved party may petition the Private Investigations Regulatory Board for a hearing to determine whether or not a licensee or associate; defaulted upon an obligation owed to the aggrieved party by the licensee or associate; whether, if such an obligation is found, it arose within the licensee's or associate's scope of employment while providing investigative services; and if so, the amount of damages suffered by the aggrieved party.  Said hearing shall be governed by the procedures of Chapter 150B of the General Statutes.
(c)	Claims filed under this Chapter may only be brought for obligations incurred on or after July 1, 1991.
(d)	Until such time as the Fund reaches twenty thousand dollars ($20,000), or at any time the Fund has insufficient assets in excess of twenty thousand dollars ($20,000) to pay outstanding claims, the State Treasurer shall not disburse any payments to an aggrieved party.  However, any party aggrieved and awarded payment as ordered by the Private Investigations Regulatory Board which order is dated after July 1, 1991, shall hold a vested right for payment plus interest as provided in G.S. 24-1 once the Fund reaches a sufficient level for payments.  Authorized payments which cannot be made due to a lack of funds will be paid as funds become available, beginning with those payments which have been unsatisfied for the longest period of time.
(e)	Hearings held pursuant to this Article shall be separate and apart from any authorized pursuant to Article 1 of this Chapter.  However, there is no prohibition against, if the Private Investigations Regulatory Board so desires, holding hearings pursuant to Article 1 and Article 2 at the same location, on the same date, or in front of the same hearing officer provided that in so doing no provisions of Chapter 150B of the General Statutes are violated.
"§ 74E-22.  Order directing payment out of Fund.
If the Private Investigations Regulatory Board finds, after a hearing pursuant to G.S. 74E-19, that the Fund as guarantor, should make a payment to an aggrieved party, the Board shall enter an order directed to the State Treasurer authorizing payment from the Fund of whatever sum the Board shall find to be payable in accordance with the limitations contained in this Article.
"§ 74E-23.  Maximum liability; pro rata distribution.
(a)	Payment from the Fund shall be subject to the following limitations:
(1)	The Fund shall not be liable for more than five thousand dollars ($5,000) per obligation, regardless of the number of persons aggrieved; and
(2)	The liability of the Fund shall not exceed in the aggregate ten thousand dollars ($10,000) for any one licensee or associate within a single calendar year.
(b)	If the maximum liability of the Fund is insufficient to pay in full the valid claims of all aggrieved persons whose claims relate to the same obligation to the same licensee or associate, the amount for which the Fund is liable shall be distributed among the claimants in a ratio that their respective claims bear to the total of such valid claims, or in such manner as the Private Investigations Regulatory Board deems equitable.  Upon action of the Board of parties, the Board may require all claimants and prospective claimants to be joined in one action to the end that the respective rights of all such claimants to the Fund may be equitably adjudicated and settled."
Sec. 2.  G.S. 74C-3(a) reads as rewritten:
"(a)	As used in this Chapter, the term ‘private protective services profession' means and includes the following:
(1)	‘Armored car profession' means any person, firm, association, or corporation which provides secured transportation and protection from one place or point to another place or point of money, currency, coins, bullion, securities, checks, documents, stocks, bonds, jewelry, paintings, and other valuables for a fee or other valuable consideration.  This definition does not include a person operating an armored car business pursuant to a motor carrier certificate or permit issued by the North Carolina Utilities Commission which grants operating rights for such business; however, armed armored car service guards shall be subject to the provisions of G.S. 74C-13.
(2)	Repealed by Session Laws 1983, c. 786, s. 2, effective January 1, 1984.
	(4)	‘Courier service profession' means any person, firm, association, or corporation which transports or offers to transport from one place or point to another place or point documents, papers, maps, stocks, bonds, checks, or other small items of value which require expeditious service for a fee or other valuable consideration. This definition does not include a person operating a courier service pursuant to a motor carrier certificate or permit issued by the North Carolina Utilities Commission which grants operating rights for such service; however, armed courier service guards shall be subject to the provisions of G.S. 74C-13.
(5)	‘Detection of deception examiner' means any person, firm, association, or corporation which uses any device or instrument, regardless of its name or design, for the purpose of the detection of deception or any person who reviews the work product of an examiner including charts, tapes or other methods of record keeping for the purpose of detecting deception or determining accuracy.
(6)	‘Security guard and patrol profession' means any person, firm, association, or corporation that provides a security guard on a contractual basis for another person, firm, association, or corporation for a fee or other valuable consideration and performing one or more of the following functions:
a.	Prevention or detection of intrusion, entry, larceny, vandalism, abuse, fire, or trespass on private property;
b.	Prevention, observation, or detection of any unauthorized activity on private property;
c.	Protection of patrons and persons lawfully authorized to be on the premises of the person, firm, association, or corporation that entered into the contract for security services; or
d.	Control, regulation, or direction of the flow or movement of the public, whether by vehicle or otherwise, only to the extent and for the time directly and specifically required to assure the protection of properties.
(7)	‘Guard-dog service profession' means any person, firm, association, or corporation which contracts with another person, firm, association, or corporation to place, lease, rent, or sell a trained dog for the purpose of protecting lives or property for a fee or other valuable consideration.
							(9)	‘Special limited guard and patrol profession' means any person who is licensed under Chapter 74D of the General Statutes of North Carolina and provides armed alarm responders pursuant to G.S. 74C-13.  Applicants for this limited license shall not be required to meet the experience requirements for a security guard and patrol license.  Any experience gained under this limited license shall not be counted as experience for a security guard and patrol license."
Sec. 3.  Section 2 of this act becomes effective January 1, 1992.  The remainder of this act is effective upon ratification.