GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

S	1 

SENATE BILL 1092

Short Title:  Private Protective Services Changes.	(Public)

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Sponsors: Senator Ballantine.

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Referred to:  Judiciary I/Constitution

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May 4, 1995

A BILL TO BE ENTITLED
AN ACT TO REORGANIZE CHAPTER 74C OF THE GENERAL STATUTES REGARDING PRIVATE PROTECTIVE SERVICES AND TO MAKE VARIOUS AMENDMENTS TO THAT CHAPTER.
The General Assembly of North Carolina enacts:
Section 1.  The title of Article 1 of Chapter 74C of the General Statutes reads as rewritten:
" General Provisions."
Sec. 2.  G.S. 74C-1, 74C-2, 74C-3, 74C-4, 74C-5, 74C-6, 74C-7, 74C-8, 74C-9, 74C-10, 74C-12, 74C-15, 74C-16, 74C-17, 74C-18, 74C-19, 74C-20, and 74C-21 are designated as Article 1 of Chapter 74C of the General Statutes.
Sec. 3.  The Revisor of Statutes is directed to change in the General Statutes all cross-references to statutes recodified by this act to be references to the statutes as recodified.
Sec. 4.  G.S. 74C-11, 74C-13, and 74C-14 are recodified as G.S. 74C-24, 74C-25, and 74C-26 respectively, and are designated as Article 1A of Chapter 74C of the General Statutes, to be entitled "Guard and Patrol".
Sec. 5.  G.S. 74C-2 reads as rewritten:
"§ 74C-2. Licenses required.
(a)	No private person, firm, association, or corporation shall engage in, perform any services as, or in any way represent or hold itself out as engaging in a private protective services profession or activity in this State without having first complied with the provisions of this Chapter. Compliance with the licensing requirements of this Chapter shall not relieve any person, firm, association or corporation from compliance with any other licensing law.
(b)	An individual in possession of a valid private protective services license or private investigator associate permit issued prior to October 1, 1989, shall not be subject to forfeiture of such license by virtue of this Chapter. Such license shall, however, remain subject to suspension, denial, or revocation in the same manner in which all other licenses issued pursuant to this Chapter are subject to suspension, denial, or revocation.
(c)	In its discretion, the Private Protective Services Board may issue an associate permit in lieu of a private investigator license provided that the applicant works under the direct supervision of a licensee."
Sec. 6.  G.S. 74C-3(a)(8) reads as rewritten:
"(8)	"'Private investigator' means any person who engages in the profession of or accepts employment to furnish, agrees to make, or makes inquiries or investigations concerning the below-listed topics on a contractual basis:
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, whereabouts, affiliations, associations, transactions, acts, reputation, civil and criminal history of a company or an individual, or character of any person;
c.	The location, disposition, or recovery of lost or stolen property;
d.	The cause or responsibility for fires, libels, losses, accidents, damages, or injuries to persons or to properties;
e.	Securing evidence to be used before any court, board, officer, or investigative committee; or
f.	Protection of individuals from serious bodily harm or death."
Sec. 7.  G.S. 74C-3(b)(8) reads as rewritten:
"(8)	Employees of a licensee who are employed exclusively as undercover agents.  For purposes of this subdivision, undercover agent means an employee who is employed exclusively by, paid by, and under the supervision of a licensee as an undercover agent for the purpose of acting as an undercover operative;".
Sec. 8.  G.S. 74C-3(a) is amended by adding a new subdivision to read:
"(10)	'Executive protective professional' means any person who is licensed under this Chapter who contracts to provide protection of individuals from serious bodily harm or death."
Sec. 9.  G.S. 74C-4(b) reads as rewritten:
	"(b) The Board shall consist of 10 members: the Attorney General or his designated representative, two persons appointed by the Attorney General, one person appointed by the Governor, two persons appointed by the General Assembly upon the recommendation of the President of the Senate, one person appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate, and three persons appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives. All appointments by the General Assembly shall be subject to the provisions of G.S. 120-121, and vacancies in the positions filled by those appointments shall be filled pursuant to G.S. 120-122. Those 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 not be licensees of the Board nor licensed by the Board while serving as Board members. Each appointment who is a licensee under this Chapter shall derive the majority of his or her income from the licensee's work as a licensee.  All persons appointed shall serve terms of three years. With the exception of the Attorney General or his designated representative, no person shall serve more than eight consecutive years on the Board, including years of service prior and subsequent to July 1, 1983. Board members may continue to serve until their successors have been appointed."
Sec. 10.  G.S. 74C-5 reads as rewritten:
"§ 74C-5. Powers of the Board. 
In addition to the powers conferred upon the Board elsewhere in this Chapter, the Board shall have the power to:
(1)	Promulgate rules necessary to carry out and administer the provisions of this Chapter including the authority to require the submission of reports and information by licensees under this Chapter;
(2)	Determine minimum qualifications, establish and require written or oral examinations, and establish minimum education, experience, and training standards for applicants and licensees under this Chapter;
(3)	Conduct investigations regarding alleged violations and to 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 or associate permit issued or to be issued under this Chapter to any applicant, licensee, or permit holder who fails to satisfy the requirements of this Chapter or the rules established by the Board. The denial, suspension, or revocation shall be in accordance with Chapter 150B of the General Statutes of North Carolina;
(7)	Issue subpoenas to compel the attendance of witnesses and the production of pertinent books, accounts, records, and documents. The district court shall have the power to impose punishment pursuant to Chapter 5A, Article 2, for acts occurring in matters pending before the Private Protective Services Board which would constitute civil contempt if the acts occurred in an action pending in court; and
(8)	Repealed by Session Laws 1989, c. 759, s. 5.
(9)	Establish rules governing detection of deception schools, and charge fees for reimbursement of costs incurred pursuant to approval of such schools."
Sec. 11.  G.S. 74C-6 reads as rewritten:
"§ 74C-6. Position of Director created.
The position of Director of the Private Protective Services Board is hereby created within the State Bureau of Investigation. The Attorney General shall appoint a person to fill this full-time position. The Director's duties shall be to administer the directives contained in this Chapter and the rules promulgated by the Board to implement this Chapter and to carry out the administrative duties incident to the functioning of the Board in order to actively police the private protective services industry to ensure compliance with the law in all aspects and to further enhance the professional nature of the industry."
Sec. 12.  G.S. 74C-8(b) reads as rewritten:
"(b)	The application shall include:
(1)	Full name, home address, post office box, and the actual street address of the business of the applicant;
(2)	The name 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 Board; and
(7)	Accompanying associate permit applications only, a notarized statement signed by the applicant and his employer stating that the associate applicant will at all times work with and under the direct supervision of a licensed private investigator."
Sec. 13.  G.S. 74C-9 reads as rewritten:
"§ 74C-9.  Form of license; term; renewal; posting; branch offices; not assignable; late renewal fee.
(a)	The license when issued shall be in such form as may be determined by the Board and shall state:
(1)	The name of the licensee,
(2)	The name under which the licensee is to operate, and
(3)	The number and expiration date of the license.
(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 North Carolina, unless for good cause exempted by the Administrator. A license issued under this Chapter is not assignable.
(c)	 Repealed by Session Laws 1989, c. 759, s. 7.
(d)	The operator or manager of any branch office shall be properly licensed or registered.  The license shall be posted at all times in a conspicuous place in the branch office.  This license shall be issued for a term of one year.  Every business covered under the provisions of this Chapter shall file in writing with the 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 the application, issue a temporary branch office license pending approval of the application by the Board.
(e)	The Board is authorized to charge reasonable application and license fees as follows:
(1)	A nonrefundable initial application fee in an amount not to exceed one hundred fifty dollars ($150.00);
(2)	A new or renewal license fee in an amount not to exceed five hundred dollars ($500.00);
(3)	A new or renewal associate permit fee in an amount not to exceed two hundred fifty dollars ($250.00);
(4)	A new or renewal fee for each license or duplicate license in addition to the basic license referred to in subsection (2) in an amount not to exceed fifty dollars ($50.00);
(5)	A late renewal fee to be paid in addition to the renewal fee due in an amount not to exceed one hundred dollars ($100.00), if the license has not been renewed on or before the expiration date of the licensee;
(6)	A new, renewal, replacement or reissuance fee for an unarmed registration identification card in an amount not to exceed thirty dollars ($30.00);
(7)	An application fee for an armed security guard firearm registration permit not to exceed fifty dollars ($50.00);
(8)	A new, renewal, replacement, or reissuance fee for an armed security guard firearm registration permit not to exceed thirty dollars ($30.00);
(9)	An application fee for certification as a certified trainer not to exceed fifty dollars ($50.00);
(10)	A renewal or replacement fee for certified trainer certification not to exceed twenty-five dollars ($25.00);
(11)	A new nonresident temporary permit fee not to exceed one hundred dollars ($100.00);
(12)	An unarmed registration transfer fee not to exceed fifteen dollars ($15.00);
(13)	A branch office license fee not to exceed fifty dollars ($50.00); and
(14)	A special limited guard and patrol license fee not to exceed one hundred dollars ($100.00).
Except as provided in G.S. 74C-13(k), all fees collected pursuant to this section shall be expended, under the direction of the Board, for the purpose of defraying the expenses of administering this Chapter.
(f)	A license or associate permit granted under the provisions of this Chapter may be renewed by the Private Protective Services Board upon notification by the licensee or permit holder to the Administrator of intended renewal, the payment of the proper fee, and evidence of a policy of liability insurance as prescribed in G.S. 74C-10(e).
The renewal shall be finalized before the expiration date of the license. In no event will renewal be granted more than three months after the date of expiration of a license or associate permit.
(g)	Upon notification of approval of his application by the Board, an applicant must furnish evidence that he has obtained the necessary liability insurance required by G.S. 74C-10 and obtain the license applied for or his application shall lapse.
(h)	Associate permits shall not be issued to applicants that qualify for a private investigator license. A licensed private investigator may supervise no more than five associates at any given time."
Sec. 14.  G.S. 74C-10(e) reads as rewritten:
"(e)	No license shall be issued under this Chapter unless the applicant files with the Board evidence of a policy of liability insurance.  The policy must provide for the following minimum coverage: one million dollars ($1,000,000) because of bodily injury or death of one person as a result of the negligent act or acts of the principal insured or his agents operating in the course and scope of his employment; subject to said limit for one person, one million dollars ($1,000,000) because of bodily injury or death of two or more persons as a result of the negligent act or acts of the principal insured or his agents operating in the course and scope of his or her agency; twenty thousand dollars ($20,000) because of injury to or destruction of property of others as a result of the negligent act or acts of the principal insured or his agents operating in the course and scope of his or her agency."
Sec. 15.  G.S. 74C-10(g) reads as rewritten:
"(g)	The holder of any associate permit and persons registered pursuant to G.S. 74C-11 shall not be required to obtain a certificate of liability insurance."
Sec. 16.  G.S. 74C-12(a)(27) reads as rewritten:
"(27)	Worn, carried, or accepted any badge or shield purporting to indicate that the person is a private investigator while licensed under the provisions of this Chapter as a private investigator."
Sec. 17.  G.S. 74C-13(a)(1) reads as rewritten:
"(1)	'Armed security guard' means an individual employed by a contract security company or a proprietary security organization whose principal duty is that of an armed security watchman; armed armored car service guard; armed alarm system company responder; private investigator; or armed courier service guard who at any time wears, carries, or possesses a firearm in the performance of duty."
Sec. 18.  G.S. 74C-15 reads as rewritten:
"§ 74C-15.  Pocket identification cards issued to licensees and associates.
(a)	Upon the issuance of a license or associate permit, a pocket identification card of design, size, and content approved by the 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 on duty and working within the scope of his employment. 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."
Sec. 19.  G.S. 74C-21(a) reads as rewritten:
"(a)	No law enforcement officer of the United States, this State, any other state, or any political subdivision of a state shall be licensed as a private investigator or security guard and patrol licensee under this Chapter."
Sec. 20.  G.S 74C-21 is amended by adding a new subsection to read:
"( d)	A law enforcement officer shall not be employed as a private investigator or an executive protection professional during the law enforcement officer's off-duty hours."
Sec. 21.  G.S. 74C-30 reads as rewritten:
"§ 74C-30. Private Protective Services 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 Protective Services Recovery Fund' (hereinafter 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)	Nothing contained in this Article shall limit the authority of the Board to take disciplinary action against any licensee or associate under this Chapter, nor shall the repayment in full or all obligations to the Fund by any licensee or associate nullify or modify the effect of any other disciplinary proceeding brought under this Chapter.
(c)	In addition to the fees provided for elsewhere in this Chapter, the Board shall charge the following fees which shall be deposited into the Fund:
(1) 	On July 1, 1983, the Board shall charge every licensee and associate possessing a license or associate permit on that date a fee of fifty dollars ($50.00);
(2) 	The Board shall charge each new applicant for a licensee or associate permit fifty dollars ($50.00), provided that for purposes of this Article a new applicant is hereby defined as an applicant who did not possess a license or associate permit on July 1, 1995; and
(3) 	The Board is authorized to charge each licensee and associate an additional amount, not to exceed fifty dollars ($50.00), on July 1 of any year in which the balance of the Fund is less than one hundred thousand dollars ($100,000), provided that any amount so assessed will be only so much as is needed to raise the level of the Fund to one hundred thousand dollars ($100,000).
(d)	The State Treasurer shall invest and reinvest the moneys in the Fund in a manner 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 protective services field for the benefit of those licensed under the provisions of this Chapter and for the improvement of the industry;
(2) 	To underwrite educational seminars, training centers and other educational projects for the use and benefit generally of licensees and associates; and
(3) 	To sponsor, contract for and to underwrite any and all additional educational training and research projects of a similar nature having to do with the advancement of the private protective services field in North Carolina."
Sec. 22.  G.S. 74C-31(a) reads as rewritten:
"(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 an 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 protective services. The 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; and
(3)	Losses that have been otherwise received from or paid by or on behalf of the licensee who defaulted on an obligation."
Sec. 23.  G.S. 74C-31(b) reads as rewritten:
"(b)	An aggrieved party may petition the 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 private protective 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."
Sec. 24.  G.S. 74C-33 reads as rewritten:
"§ 74C-33. Maximum liability; pro rata distribution.
(a)	Payments 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 or 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 Board deems equitable. Upon action of the Board or 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. 25.  This act is effective upon ratification.