SB 177: Alarm companies: limited liability companies.
- Session Year: 2015-2016
- House: Senate
- Latest Version Date: 2015-08-07
The Alarm Company Act provides for the licensure, registration, and regulation of alarm company operators and alarm agents by the Bureau of Security and Investigative Services within the Department of Consumer Affairs and makes a violation of the act a crime. The act authorizes the bureau, until January 1, 2016, to issue an alarm company operator license to a limited liability company.
This bill would extend the authorization of the bureau to issue an alarm company operator license to a limited liability company until January 1, 2019. Because a violation of the Alarm Company Act by a limited liability company would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
The Alarm Company Act provides for the licensure, registration, and regulation of alarm company operators and alarm agents by the Bureau of Security and Investigative Services within the Department of Consumer Affairs and makes a violation of the act a crime. The act authorizes the bureau, until January 1, 2016, to issue an alarm company operator license to a limited liability company.
This bill would extend the authorization of the bureau to issue an alarm company operator license to a limited liability company until January 1, 2019. Because a violation of the Alarm Company Act by a limited liability company would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
The Alarm Company Act provides for the licensure, registration, and regulation of alarm company operators and alarm agents by the Bureau of Security and Investigative Services within the Department of Consumer Affairs and makes a violation of the act a crime. The act authorizes the bureau, until January 1, 2016, to issue an alarm company operator license to a limited liability company.
This bill would extend the authorization of the bureau to issue an alarm company operator license to a limited liability company until January 1, 2022. 2019. Because a violation of the Alarm Company Act by a limited liability company would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
The Alarm Company Act provides for the licensure, registration, and regulation of alarm company operators and alarm agents by the Bureau of Security and Investigative Services within the Department of Consumer Affairs and makes a violation of the act a crime. The act authorizes the bureau, until January 1, 2016, to issue an alarm company operator license to a limited liability company.
This bill would extend the authorization of the bureau to issue an alarm company operator license to a limited liability company until January 1, 2022. Because a violation of the Alarm Company Act by a limited liability company would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
The following terms as used in this chapter have the meaning expressed in this article:
(a)Person means any individual, firm, company, association, organization, partnership, limited liability company, or corporation.
(b)Department means the Department of Consumer Affairs.
(c)Director means the Director of Consumer Affairs.
(d)Bureau means the Bureau of Security and Investigative Services.
(e)Chief means the Chief of the Bureau of Security and Investigative Services.
(f)Employer means a person who employs an individual for wages or salary, lists the individual on the employers payroll records, and withholds all legally required deductions and contributions.
(g)Employee means an individual who works for an employer, is listed on the employers payroll records, and is under the employers direction and control.
(h)Employer-employee relationship means an individual who works for another and where the individuals name appears on the payroll records of the employer.
(i)Licensee means a business entity, whether an individual, partnership, limited liability company, or corporation licensed under this chapter.
(j)Qualified manager means an individual who is in active control, management, and direction of the licensees business, and who is in possession of a current and valid qualified managers certificate pursuant to this chapter.
(k)Registrant means any person registered or who has applied for registration under this chapter.
(l)Branch office means any location, other than the principal place of business of the licensee, which is licensed as set forth in Article 11 (commencing with Section 7599.20).
(m)Branch office manager means an individual designated by the qualified manager to manage the licensees branch office and who has met the requirements as set forth in Article 11 (commencing with Section 7599.20).
(n)Alarm system means an assembly of equipment and devices arranged to signal the presence of a hazard requiring urgent attention and to which police are expected to respond.
(o)Alarm agent means a person employed by an alarm company operator whose duties include selling on premises, altering, installing, maintaining, moving, repairing, replacing, servicing, responding, or monitoring an alarm system, or a person who manages or supervises a person employed by an alarm company to perform any of the duties described in this subdivision or any person in training for any of the duties described in this subdivision.
(p)Deadly weapon means and includes any instrument or weapon of the kind commonly known as a blackjack, slungshot, billy, sandclub, sandbag, metal knuckles; any dirk, dagger, pistol, revolver, or any other firearm; any knife having a blade longer than five inches; any razor with an unguarded blade; or any metal pipe or bar used or intended to be used as a club.
(q)Firearms permit means a permit issued by the bureau, pursuant to Article 6 (commencing with Section 7596), to a licensee, a qualified manager, or an alarm agent, to carry an exposed firearm while on duty.
(r)(1)Advertisement means:
(A)Any written or printed communication for the purpose of soliciting, describing, or promoting the licensed business of the licensee, including a brochure, letter, pamphlet, newspaper, periodical, publication, or other writing.
(B)A directory listing caused or permitted by the licensee which indicates his or her licensed activity.
(C)A radio, television, or similar airwave transmission which solicits or promotes the licensed business of the licensee.
(2)Advertisement does not include any of the following:
(A)Any printing or writing used on buildings, vehicles, uniforms, badges, or other property where the purpose of the printing or writing is identification.
(B)Any printing or writing on communications, memoranda, or any other writings used in the ordinary course of business where the sole purpose of the writing is other than the solicitation or promotion of business.
(C)Any printing or writing on novelty objects used in the promotion of the licensees business where the printing of the information required by this chapter would be impractical due to the available area or surface.
(s)Residential sales agreement means and includes an agreement between an alarm company operator and an owner or tenant for the purchase of an alarm system to be utilized in the personal residence of the owner or tenant.
(t)Firearm permit means and includes firearms permit, firearms qualification card, firearms qualification, and firearms qualification permit.
(u)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 2.Section 7590.1 of the Business and Professions Code, as added by Section 3 of Chapter 291 of the Statutes of 2012, is amended to read:7590.1.The following terms as used in this chapter have the meaning expressed in this article:
(a)Person means any individual, firm, company, association, organization, partnership, limited liability company, or corporation.
(b)Department means the Department of Consumer Affairs.
(c)Director means the Director of Consumer Affairs.
(d)Bureau means the Bureau of Security and Investigative Services.
(e)Chief means the Chief of the Bureau of Security and Investigative Services.
(f)Employer means a person who employs an individual for wages or salary, lists the individual on the employers payroll records, and withholds all legally required deductions and contributions.
(g)Employee means an individual who works for an employer, is listed on the employers payroll records, and is under the employers direction and control.
(h)Employer-employee relationship means an individual who works for another and where the individuals name appears on the payroll records of the employer.
(i)Licensee means a business entity, whether an individual, partnership, or corporation licensed under this chapter.
(j)Qualified manager means an individual who is in active control, management, and direction of the licensees business, and who is in possession of a current and valid qualified managers certificate pursuant to this chapter.
(k)Registrant means any person registered or who has applied for registration under this chapter.
(l)Branch office means any location, other than the principal place of business of the licensee, which is licensed as set forth in Article 11 (commencing with Section 7599.20).
(m)Branch office manager means an individual designated by the qualified manager to manage the licensees branch office and who has met the requirements as set forth in Article 11 (commencing with Section 7599.20).
(n)Alarm system means an assembly of equipment and devices arranged to signal the presence of a hazard requiring urgent attention and to which police are expected to respond.
(o)Alarm agent means a person employed by an alarm company operator whose duties include selling on premises, altering, installing, maintaining, moving, repairing, replacing, servicing, responding, or monitoring an alarm system, or a person who manages or supervises a person employed by an alarm company to perform any of the duties described in this subdivision or any person in training for any of the duties described in this subdivision.
(p)Deadly weapon means and includes any instrument or weapon of the kind commonly known as a blackjack, slungshot, billy, sandclub, sandbag, metal knuckles; any dirk, dagger, pistol, revolver, or any other firearm; any knife having a blade longer than five inches; any razor with an unguarded blade; or any metal pipe or bar used or intended to be used as a club.
(q)Firearms permit means a permit issued by the bureau, pursuant to Article 6 (commencing with Section 7596), to a licensee, a qualified manager, or an alarm agent, to carry an exposed firearm while on duty.
(r)(1)Advertisement means:
(A)Any written or printed communication for the purpose of soliciting, describing, or promoting the licensed business of the licensee, including a brochure, letter, pamphlet, newspaper, periodical, publication, or other writing.
(B)A directory listing caused or permitted by the licensee which indicates his or her licensed activity.
(C)A radio, television, or similar airwave transmission which solicits or promotes the licensed business of the licensee.
(2)Advertisement does not include any of the following:
(A)Any printing or writing used on buildings, vehicles, uniforms, badges, or other property where the purpose of the printing or writing is identification.
(B)Any printing or writing on communications, memoranda, or any other writings used in the ordinary course of business where the sole purpose of the writing is other than the solicitation or promotion of business.
(C)Any printing or writing on novelty objects used in the promotion of the licensees business where the printing of the information required by this chapter would be impractical due to the available area or surface.
(s)Residential sales agreement means and includes an agreement between an alarm company operator and an owner or tenant for the purchase of an alarm system to be utilized in the personal residence of the owner or tenant.
(t)Firearm permit means and includes firearms permit, firearms qualification card, firearms qualification, and firearms qualification permit.
(u)This section shall become operative on January 1, 2019.
SEC. 3.Section 7591.10 of the Business and Professions Code, as amended by Section 4 of Chapter 291 of the Statutes of 2012, is amended to read:7591.10.(a)The director may deny a license, certificate, or registration regulated by this chapter on the grounds that the applicant has done any of the following:
(1)Knowingly made a false statement of fact required to be revealed in the application for a license.
(2)Been convicted of a crime. A conviction within the meaning of this section means a plea or verdict of guilty or a conviction following a plea of nolo contendere. Any action which the bureau is permitted to take following the establishment of a conviction may be taken when the time for appeal has elapsed, or the judgment of conviction has been affirmed on appeal, or when an order granting probation is made suspending the imposition of sentence, irrespective of a subsequent order under the provisions of Section 1203.4 of the Penal Code.
(3)Done any act involving dishonesty, fraud, or deceit with the intent to substantially benefit himself, herself, or another, or to substantially injure another.
(4)Done any act which if done by a licensee would be grounds for suspension or revocation of a license.
(5)Done any act without a license for which a license is required under this chapter.
(6)Been refused a license under this chapter or had a license revoked.
(7)Been an officer, partner, managing member, or manager of any person who has been refused a license under this chapter or whose license has been suspended or revoked.
The bureau may deny a license, certificate, or registration pursuant to this section only if the crime or act is substantially related to the qualifications, functions, or duties of the license, certificate, or registration for which application has been made.
The denial of a license, certificate, or registration shall be in writing and shall describe the basis for the denial. The denial shall inform the applicant that if he or she desires a review by the disciplinary review committee the review shall be requested within 30 days of the issuance of the denial. A review shall be held pursuant to the provisions of Section 7591.19.
(b)Notwithstanding any other provision of this chapter, no person shall be denied a license, certificate, or registration solely on the basis that he or she has been convicted of a felony, if he or she has obtained a certificate of rehabilitation pursuant to Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part 3 of the Penal Code, or solely on the basis that he or she has been convicted of a misdemeanor, if he or she has met all applicable requirements of the criteria of rehabilitation as provided in Section 7591.12.
(c)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 4.Section 7591.10 of the Business and Professions Code, as added by Section 5 of Chapter 291 of the Statutes of 2012, is amended to read:7591.10.(a)The director may deny a license, certificate, or registration regulated by this chapter on the grounds that the applicant has done any of the following:
(1)Knowingly made a false statement of fact required to be revealed in the application for a license.
(2)Been convicted of a crime. A conviction within the meaning of this section means a plea or verdict of guilty or a conviction following a plea of nolo contendere. Any action which the bureau is permitted to take following the establishment of a conviction may be taken when the time for appeal has elapsed, or the judgment of conviction has been affirmed on appeal, or when an order granting probation is made suspending the imposition of sentence, irrespective of a subsequent order under the provisions of Section 1203.4 of the Penal Code.
(3)Done any act involving dishonesty, fraud, or deceit with the intent to substantially benefit himself, herself, or another, or to substantially injure another.
(4)Done any act which if done by a licensee would be grounds for suspension or revocation of a license.
(5)Done any act without a license for which a license is required under this chapter.
(6)Been refused a license under this chapter or had a license revoked.
(7)Been an officer, partner, or manager of any person who has been refused a license under this chapter or whose license has been suspended or revoked.
The bureau may deny a license, certificate, or registration pursuant to this section only if the crime or act is substantially related to the qualifications, functions, or duties of the license, certificate, or registration for which application has been made.
The denial of a license, certificate, or registration shall be in writing and shall describe the basis for the denial. The denial shall inform the applicant that if he or she desires a review by the disciplinary review committee the review shall be requested within 30 days of the issuance of the denial. A review shall be held pursuant to the provisions of Section 7591.19.
(b)Notwithstanding any other provision of this chapter, no person shall be denied a license, certificate, or registration solely on the basis that he or she has been convicted of a felony, if he or she has obtained a certificate of rehabilitation pursuant to Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part 3 of the Penal Code, or solely on the basis that he or she has been convicted of a misdemeanor, if he or she has met all applicable requirements of the criteria of rehabilitation as provided in Section 7591.12.
(c)This section shall become operative on January 1, 2019.
SEC. 5.Section 7593.1 of the Business and Professions Code, as amended by Section 9 of Chapter 291 of the Statutes of 2012, is amended to read:7593.1.(a)Each individual applicant and each qualified manager, partner of a partnership, designated officer of a corporation, and designated officer and managing member of a limited liability company shall submit with the application one personal identification form provided by the chief, upon which shall appear a photograph taken within one year immediately preceding the date of the filing of the application together with two legible sets of fingerprints, one set of which shall be forwarded to the Federal Bureau of Investigation for purposes of a background check, and personal description of each such person, respectively. The identification form shall include residence addresses and employment history for the previous five years.
(b)The bureau may impose a fee not to exceed three dollars ($3) for processing classifiable fingerprint cards submitted by applicants excluding those submitted into an electronic fingerprint system using electronic fingerprint technology.
(c)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 6.Section 7593.1 of the Business and Professions Code, as added by Section 10 of Chapter 291 of the Statutes of 2012, is amended to read:7593.1.(a)Each individual applicant and each qualified manager, partner of a partnership, and designated officer of a corporation shall submit with the application, one personal identification form provided by the chief upon which shall appear a photograph taken within one year immediately preceding the date of the filing of the application together with two legible sets of fingerprints, one set of which shall be forwarded to the Federal Bureau of Investigation for purposes of a background check, and personal description of each such person, respectively. The identification form shall include residence addresses and employment history for the previous five years.
(b)The bureau may impose a fee not to exceed three dollars ($3) for processing classifiable fingerprint cards submitted by applicants excluding those submitted into an electronic fingerprint system using electronic fingerprint technology.
(c)This section shall become operative on January 1, 2019.
SEC. 7.Section 7593.6 of the Business and Professions Code, as amended by Section 12 of Chapter 291 of the Statutes of 2012, is amended to read:7593.6.(a)The director may refuse to issue a license to an applicant pending final disposition of an investigation of criminal activity or of a disciplinary action previously filed against the person or applicant or against a qualified manager, partner, managing member, or officer of the applicant.
(b)A new alarm company operator license, qualified manager certificate, or alarm agent registration shall be subject to payment of any and all fines assessed pursuant to this section and not resolved in accordance with the provisions of this section and payment of all applicable fees.
(c)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 8.Section 7593.6 of the Business and Professions Code, as added by Section 13 of Chapter 291 of the Statutes of 2012, is amended to read:7593.6.(a)The director may refuse to issue a license to an applicant pending final disposition of an investigation of criminal activity or of a disciplinary action previously filed against the person or applicant or against a qualified manager, partner, or officer of the applicant.
(b)A new alarm company operator license, qualified manager certificate, or alarm agent registration shall be subject to payment of any and all fines assessed pursuant to this section and not resolved in accordance with the provisions of this section and payment of all applicable fees.
(c)This section shall become operative on January 1, 2019.
SEC. 9.Section 7593.7 of the Business and Professions Code, as amended by Section 14 of Chapter 291 of the Statutes of 2012, is amended to read:7593.7.(a)The chief shall issue a pocket identification card to the owner, partners, officers, managing members, and qualified manager. The chief shall determine the form and content of the card. A photo identification card will be furnished to any owner, partner, officer, managing member, qualified manager, or branch office manager upon written request and payment of the fee prescribed by this chapter.
(b)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 10.Section 7593.7 of the Business and Professions Code, as added by Section 15 of Chapter 291 of the Statutes of 2012, is amended to read:7593.7.(a)The chief shall issue a pocket identification card to the owner, partners, officers, and qualified manager. The chief shall determine the form and content of the card. A photo identification card will be furnished to any owner, partner, officer, qualified manager, or branch office manager upon written request and payment of the fee prescribed by this chapter.
(b)This section shall become operative on January 1, 2019.
SEC. 11.Section 7594.4 of the Business and Professions Code, as amended by Section 18 of Chapter 291 of the Statutes of 2012, is amended to read:7594.4.(a)Except as herein otherwise provided, no individual shall be in active charge of the business if the individual has ever had a license revoked for cause or has ever been disqualified from further employment in the alarm company operator business pursuant to this chapter, or was a qualified manager, partner, managing member, or officer of a business whose license has been revoked.
(b)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 12.Section 7594.4 of the Business and Professions Code, as added by Section 19 of Chapter 291 of the Statutes of 2012, is amended to read:7594.4.(a)Except as herein otherwise provided, no individual shall be in active charge of the business if the individual has ever had a license revoked for cause or has ever been disqualified from further employment in the alarm company operator business pursuant to this chapter, or was a qualified manager, partner, or officer of a business whose license has been revoked.
(b)This section shall become operative on January 1, 2019.
SEC. 13.Section 7599.32 of the Business and Professions Code, as amended by Section 20 of Chapter 291 of the Statutes of 2012, is amended to read:7599.32.(a)A licensee shall notify the bureau within 30 days of any change of its officers or members required to be named pursuant to Section 7593.4 or 7593.5 and of any addition of a new partner.
(b)Applications, on forms prescribed by the director, shall be submitted by all new officers, managing members, and partners. The director may suspend or revoke a license issued under this chapter if the director determines that the new officer, managing member, or partner has committed any act which constitutes grounds for the denial of a license pursuant to Section 7591.10.
(c)A notice of warning may be issued for the first violation of this section and a fine of twenty-five dollars ($25) for each subsequent violation.
(d)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 14.Section 7599.32 of the Business and Professions Code, as added by Section 21 of Chapter 291 of the Statutes of 2012, is amended to read:7599.32.(a)A licensee shall notify the bureau within 30 days of any change of its officers required to be named pursuant to Section 7593.4 and of any addition of a new partner.
(b)Applications, on forms prescribed by the director, shall be submitted by all new officers and partners. The director may suspend or revoke a license issued under this chapter if the director determines that the new officer or partner has committed any act which constitutes grounds for the denial of a license pursuant to Section 7591.10.
(c)A notice of warning may be issued for the first violation of this section and a fine of twenty-five dollars ($25) for each subsequent violation.
(d)This section shall become operative on January 1, 2019.
SEC. 15.Section 7599.34 of the Business and Professions Code, as amended by Section 22 of Chapter 291 of the Statutes of 2012, is amended to read:7599.34.(a)No licensee shall conduct a business as an individual, partnership, limited liability company, or corporation unless the licensee holds a valid license issued to that exact same individual, partnership, limited liability company, or corporation. A violation of this section may result in a fine of one hundred dollars ($100) for each violation.
(b)As a condition of the issuance, reinstatement, reactivation, or continued valid use of a license under this chapter, a limited liability company shall, in accordance with the provisions of this section, maintain a policy or policies of insurance against liability imposed on or against it by law for damages arising out of claims based upon acts, errors, or omissions arising out of the alarm company services it provides.
(c)The total aggregate limit of liability under the policy or policies of insurance required under this section shall be as follows:
(1)For a limited liability company licensee with five or fewer persons named as managing members pursuant to Section 7593.5 or 7599.32, the aggregate limit shall not be less than one million dollars ($1,000,000).
(2)For a limited liability company licensee with more than five persons named as managing members pursuant to Section 7593.5 or 7599.32, an additional one hundred thousand dollars ($100,000) of insurance shall be obtained for each person named as managing members of the licensee except that the maximum amount of insurance is not required to exceed five million dollars ($5,000,000) in any one designated period, less amounts paid in defending, settling, or discharging claims as set forth under this section.
(d)Prior to the issuance, reinstatement, or reactivation of a limited liability company license as provided under this chapter, the applicant or licensee shall, in the manner prescribed by the bureau, submit the information and documentation required by this section and requested by the bureau, demonstrating compliance with the financial security requirements specified by this section.
(e)For any insurance policy secured by a licensee in satisfaction of this section, a Certificate of Liability Insurance, signed by an authorized agent or employee of the insurer, shall be submitted electronically or otherwise to the bureau. The insurer issuing the certificate shall report to the bureau the following information for any policy required under this section: name, license number, policy number, dates that coverage is scheduled to commence and lapse, the date and amount of any payment of claims, and cancellation date if applicable.
(f)If a licensee fails to maintain sufficient insurance as required by this section, the license is subject to suspension.
(g)Where the license of a limited liability company is suspended pursuant to subdivision (f), each member of the limited liability company shall be personally liable up to one million dollars ($1,000,000) each for damages resulting to third parties in connection with the companys performance, during the period of suspension, of any act or contract where a license is required by this chapter.
(h)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 16.Section 7599.34 of the Business and Professions Code, as added by Section 23 of Chapter 291 of the Statutes of 2012, is amended to read:7599.34.(a)No licensee shall conduct a business as an individual, partnership, or corporation unless the licensee holds a valid license issued to that exact same individual, partnership, or corporation. A violation of this section may result in a fine of one hundred dollars ($100) for each violation.
(b)This section shall become operative on January 1, 2019.
SEC. 17.Section 7599.42 of the Business and Professions Code, as amended by Section 24 of Chapter 291 of the Statutes of 2012, is amended to read:7599.42.(a)Within seven days after any violent incident involving a dangerous weapon that has been caused by or occurred upon a licensee or any officer, partner, managing member, qualified manager, or employee of a licensee, while acting within the course and scope of his or her employment, and that results in bodily injury to any person or death of any person involved in that incident or of any discharge of a weapon, excluding any discharge which occurs on the range, the licensee or his or her manager shall mail or deliver to the chief a detailed report of the incident. The report shall describe fully the circumstances surrounding the incident, any injuries or damages incurred, the identity of all participants, and whether a police investigation was conducted. A violation of this section may result in a fine of twenty-five dollars ($25) for the first violation and one hundred dollars ($100) for each subsequent violation.
(b)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 18.Section 7599.42 of the Business and Professions Code, as added by Section 25 of Chapter 291 of the Statutes of 2012, is amended to read:7599.42.(a)Within seven days after any violent incident involving a dangerous weapon, that has been caused by or occurred upon a licensee or any officer, partner, qualified manager, or employee of a licensee, while acting within the course and scope of his or her employment, and that results in bodily injury to any person or death of any person involved in that incident or of any discharge of a weapon, excluding any discharge which occurs on the range, the licensee or his or her manager shall mail or deliver to the chief a detailed report of the incident. The report shall describe fully the circumstances surrounding the incident, any injuries or damages incurred, the identity of all participants, and whether a police investigation was conducted. A violation of this section may result in a fine of twenty-five dollars ($25) for the first violation and one hundred dollars ($100) for each subsequent violation.
(b)This section shall become operative on January 1, 2019.
SEC. 19.Section 7599.43 of the Business and Professions Code, as amended by Section 26 of Chapter 291 of the Statutes of 2012, is amended to read:7599.43.(a)Within seven days after receiving a final civil court judgment filed against the licensee or any officer, partner, managing member, qualified manager, or employee of a licensee for an amount of more than five hundred dollars ($500) pertaining to any act done within the course and scope of his or her employment that may be in violation of this chapter, the licensee or his or her manager shall mail or deliver to the chief a copy of the judgment. A violation of this section may result in a fine of twenty-five dollars ($25) for the first violation and one hundred dollars ($100) for each subsequent violation.
(b)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 20.Section 7599.43 of the Business and Professions Code, as added by Section 27 of Chapter 291 of the Statutes of 2012, is amended to read:7599.43.(a)Within seven days after receiving a final civil court judgment filed against the licensee or any officer, partner, qualified manager, or employee of a licensee for an amount of more than five hundred dollars ($500) pertaining to any act done within the course and scope of his or her employment that may be in violation of this chapter, the licensee or his or her manager shall mail or deliver to the chief a copy of the judgment. A violation of this section may result in a fine of twenty-five dollars ($25) for the first violation and one hundred dollars ($100) for each subsequent violation.
(b)This section shall become operative on January 1, 2019.
SEC. 21.Section 7599.48 of the Business and Professions Code, as amended by Section 28 of Chapter 291 of the Statutes of 2012, is amended to read:7599.48.(a)No licensee, or officer, partner, managing member, manager, or employee of a licensee, shall knowingly make any false report to his or her employer or client for whom information is being obtained. A violation of this section may result in a fine of one hundred dollars ($100) for the first violation, and five hundred dollars ($500) for each subsequent violation.
(b)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 22.Section 7599.48 of the Business and Professions Code, as added by Section 29 of Chapter 291 of the Statutes of 2012, is amended to read:7599.48.(a)No licensee, or officer, partner, manager, or employee of a licensee, shall knowingly make any false report to his or her employer or client for whom information is being obtained. A violation of this section may result in a fine of one hundred dollars ($100) for the first violation, and five hundred dollars ($500) for each subsequent violation.
(b)This section shall become operative on January 1, 2019.
SEC. 23.Section 7599.61 of the Business and Professions Code, as amended by Section 30 of Chapter 291 of the Statutes of 2012, is amended to read:7599.61.(a)The director may suspend or revoke an alarm company operator license, a qualified manager certificate, an alarm agent registration, or a firearms permit, issued under this chapter, if the director determines that the licensee or his or her manager, if an individual, or if the licensee is a person other than an individual, or his or her employees, that any of its officers, partners, managing members, employees, or its manager, has:
(1)Made any false statement or given any false information in connection with an application for a license or a renewal or reinstatement of a license.
(2)Violated any provisions or committed any prohibited acts of this chapter.
(3)Been convicted of any felony or misdemeanor including illegally using, carrying, or possessing a dangerous weapon.
(4)Committed or permitted any employee to commit any act, while the license was expired, which would be cause for the suspension or revocation of a license, or grounds for the denial of an application for a license.
(5)Committed assault, battery, or kidnapping, or used force or violence on any person, without proper justification.
(6)Violated, or advised, encouraged, or assisted the violation of any court order or injunction in the course of business as a licensee.
(7)Been convicted of a violation of Section 148 of the Penal Code.
(8)Committed any act which is a ground for denial of an application for license under this chapter.
(9)Committed any act prohibited by Chapter 1.5 (commencing with Section 630) of Title 15 of Part 1 of the Penal Code.
(10)Committed any act in the course of the licensees business constituting dishonesty or fraud.
(b)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 24.Section 7599.61 of the Business and Professions Code, as added by Section 31 of Chapter 291 of the Statutes of 2012, is amended to read:7599.61.(a)The director may suspend or revoke an alarm company operator license, a qualified manager certificate, an alarm agent registration, or a firearms permit, issued under this chapter, if the director determines that the licensee or his or her manager, if an individual, or if the licensee is a person other than an individual, or his or her employees, that any of its officers, partners, employees, or its manager, has:
(1)Made any false statement or given any false information in connection with an application for a license or a renewal or reinstatement of a license.
(2)Violated any provisions or committed any prohibited acts of this chapter.
(3)Been convicted of any felony or misdemeanor including illegally using, carrying, or possessing a dangerous weapon.
(4)Committed or permitted any employee to commit any act, while the license was expired, which would be cause for the suspension or revocation of a license, or grounds for the denial of an application for a license.
(5)Committed assault, battery, or kidnapping, or used force or violence on any person, without proper justification.
(6)Violated, or advised, encouraged, or assisted the violation of any court order or injunction in the course of business as a licensee.
(7)Been convicted of a violation of Section 148 of the Penal Code.
(8)Committed any act which is a ground for denial of an application for license under this chapter.
(9)Committed any act prohibited by Chapter 1.5 (commencing with Section 630) of Title 15 of Part 1 of the Penal Code.
(10)Committed any act in the course of the licensees business constituting dishonesty or fraud.
(b)This section shall become operative on January 1, 2019.
SEC. 25.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
The following terms as used in this chapter have the meaning expressed in this article:
(a)Person means any individual, firm, company, association, organization, partnership, limited liability company, or corporation.
(b)Department means the Department of Consumer Affairs.
(c)Director means the Director of Consumer Affairs.
(d)Bureau means the Bureau of Security and Investigative Services.
(e)Chief means the Chief of the Bureau of Security and Investigative Services.
(f)Employer means a person who employs an individual for wages or salary, lists the individual on the employers payroll records, and withholds all legally required deductions and contributions.
(g)Employee means an individual who works for an employer, is listed on the employers payroll records, and is under the employers direction and control.
(h)Employer-employee relationship means an individual who works for another and where the individuals name appears on the payroll records of the employer.
(i)Licensee means a business entity, whether an individual, partnership, limited liability company, or corporation licensed under this chapter.
(j)Qualified manager means an individual who is in active control, management, and direction of the licensees business, and who is in possession of a current and valid qualified managers certificate pursuant to this chapter.
(k)Registrant means any person registered or who has applied for registration under this chapter.
(l)Branch office means any location, other than the principal place of business of the licensee, which is licensed as set forth in Article 11 (commencing with Section 7599.20).
(m)Branch office manager means an individual designated by the qualified manager to manage the licensees branch office and who has met the requirements as set forth in Article 11 (commencing with Section 7599.20).
(n)Alarm system means an assembly of equipment and devices arranged to signal the presence of a hazard requiring urgent attention and to which police are expected to respond.
(o)Alarm agent means a person employed by an alarm company operator whose duties include selling on premises, altering, installing, maintaining, moving, repairing, replacing, servicing, responding, or monitoring an alarm system, or a person who manages or supervises a person employed by an alarm company to perform any of the duties described in this subdivision or any person in training for any of the duties described in this subdivision.
(p)Deadly weapon means and includes any instrument or weapon of the kind commonly known as a blackjack, slungshot, billy, sandclub, sandbag, metal knuckles; any dirk, dagger, pistol, revolver, or any other firearm; any knife having a blade longer than five inches; any razor with an unguarded blade; or any metal pipe or bar used or intended to be used as a club.
(q)Firearms permit means a permit issued by the bureau, pursuant to Article 6 (commencing with Section 7596), to a licensee, a qualified manager, or an alarm agent, to carry an exposed firearm while on duty.
(r)(1)Advertisement means:
(A)Any written or printed communication for the purpose of soliciting, describing, or promoting the licensed business of the licensee, including a brochure, letter, pamphlet, newspaper, periodical, publication, or other writing.
(B)A directory listing caused or permitted by the licensee which indicates his or her licensed activity.
(C)A radio, television, or similar airwave transmission which solicits or promotes the licensed business of the licensee.
(2)Advertisement does not include any of the following:
(A)Any printing or writing used on buildings, vehicles, uniforms, badges, or other property where the purpose of the printing or writing is identification.
(B)Any printing or writing on communications, memoranda, or any other writings used in the ordinary course of business where the sole purpose of the writing is other than the solicitation or promotion of business.
(C)Any printing or writing on novelty objects used in the promotion of the licensees business where the printing of the information required by this chapter would be impractical due to the available area or surface.
(s)Residential sales agreement means and includes an agreement between an alarm company operator and an owner or tenant for the purchase of an alarm system to be utilized in the personal residence of the owner or tenant.
(t)Firearm permit means and includes firearms permit, firearms qualification card, firearms qualification, and firearms qualification permit.
(u)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 2.Section 7590.1 of the Business and Professions Code, as added by Section 3 of Chapter 291 of the Statutes of 2012, is amended to read:7590.1.The following terms as used in this chapter have the meaning expressed in this article:
(a)Person means any individual, firm, company, association, organization, partnership, limited liability company, or corporation.
(b)Department means the Department of Consumer Affairs.
(c)Director means the Director of Consumer Affairs.
(d)Bureau means the Bureau of Security and Investigative Services.
(e)Chief means the Chief of the Bureau of Security and Investigative Services.
(f)Employer means a person who employs an individual for wages or salary, lists the individual on the employers payroll records, and withholds all legally required deductions and contributions.
(g)Employee means an individual who works for an employer, is listed on the employers payroll records, and is under the employers direction and control.
(h)Employer-employee relationship means an individual who works for another and where the individuals name appears on the payroll records of the employer.
(i)Licensee means a business entity, whether an individual, partnership, or corporation licensed under this chapter.
(j)Qualified manager means an individual who is in active control, management, and direction of the licensees business, and who is in possession of a current and valid qualified managers certificate pursuant to this chapter.
(k)Registrant means any person registered or who has applied for registration under this chapter.
(l)Branch office means any location, other than the principal place of business of the licensee, which is licensed as set forth in Article 11 (commencing with Section 7599.20).
(m)Branch office manager means an individual designated by the qualified manager to manage the licensees branch office and who has met the requirements as set forth in Article 11 (commencing with Section 7599.20).
(n)Alarm system means an assembly of equipment and devices arranged to signal the presence of a hazard requiring urgent attention and to which police are expected to respond.
(o)Alarm agent means a person employed by an alarm company operator whose duties include selling on premises, altering, installing, maintaining, moving, repairing, replacing, servicing, responding, or monitoring an alarm system, or a person who manages or supervises a person employed by an alarm company to perform any of the duties described in this subdivision or any person in training for any of the duties described in this subdivision.
(p)Deadly weapon means and includes any instrument or weapon of the kind commonly known as a blackjack, slungshot, billy, sandclub, sandbag, metal knuckles; any dirk, dagger, pistol, revolver, or any other firearm; any knife having a blade longer than five inches; any razor with an unguarded blade; or any metal pipe or bar used or intended to be used as a club.
(q)Firearms permit means a permit issued by the bureau, pursuant to Article 6 (commencing with Section 7596), to a licensee, a qualified manager, or an alarm agent, to carry an exposed firearm while on duty.
(r)(1)Advertisement means:
(A)Any written or printed communication for the purpose of soliciting, describing, or promoting the licensed business of the licensee, including a brochure, letter, pamphlet, newspaper, periodical, publication, or other writing.
(B)A directory listing caused or permitted by the licensee which indicates his or her licensed activity.
(C)A radio, television, or similar airwave transmission which solicits or promotes the licensed business of the licensee.
(2)Advertisement does not include any of the following:
(A)Any printing or writing used on buildings, vehicles, uniforms, badges, or other property where the purpose of the printing or writing is identification.
(B)Any printing or writing on communications, memoranda, or any other writings used in the ordinary course of business where the sole purpose of the writing is other than the solicitation or promotion of business.
(C)Any printing or writing on novelty objects used in the promotion of the licensees business where the printing of the information required by this chapter would be impractical due to the available area or surface.
(s)Residential sales agreement means and includes an agreement between an alarm company operator and an owner or tenant for the purchase of an alarm system to be utilized in the personal residence of the owner or tenant.
(t)Firearm permit means and includes firearms permit, firearms qualification card, firearms qualification, and firearms qualification permit.
(u)This section shall become operative on January 1, 2019.
SEC. 3.Section 7591.10 of the Business and Professions Code, as amended by Section 4 of Chapter 291 of the Statutes of 2012, is amended to read:7591.10.(a)The director may deny a license, certificate, or registration regulated by this chapter on the grounds that the applicant has done any of the following:
(1)Knowingly made a false statement of fact required to be revealed in the application for a license.
(2)Been convicted of a crime. A conviction within the meaning of this section means a plea or verdict of guilty or a conviction following a plea of nolo contendere. Any action which the bureau is permitted to take following the establishment of a conviction may be taken when the time for appeal has elapsed, or the judgment of conviction has been affirmed on appeal, or when an order granting probation is made suspending the imposition of sentence, irrespective of a subsequent order under the provisions of Section 1203.4 of the Penal Code.
(3)Done any act involving dishonesty, fraud, or deceit with the intent to substantially benefit himself, herself, or another, or to substantially injure another.
(4)Done any act which if done by a licensee would be grounds for suspension or revocation of a license.
(5)Done any act without a license for which a license is required under this chapter.
(6)Been refused a license under this chapter or had a license revoked.
(7)Been an officer, partner, managing member, or manager of any person who has been refused a license under this chapter or whose license has been suspended or revoked.
The bureau may deny a license, certificate, or registration pursuant to this section only if the crime or act is substantially related to the qualifications, functions, or duties of the license, certificate, or registration for which application has been made.
The denial of a license, certificate, or registration shall be in writing and shall describe the basis for the denial. The denial shall inform the applicant that if he or she desires a review by the disciplinary review committee the review shall be requested within 30 days of the issuance of the denial. A review shall be held pursuant to the provisions of Section 7591.19.
(b)Notwithstanding any other provision of this chapter, no person shall be denied a license, certificate, or registration solely on the basis that he or she has been convicted of a felony, if he or she has obtained a certificate of rehabilitation pursuant to Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part 3 of the Penal Code, or solely on the basis that he or she has been convicted of a misdemeanor, if he or she has met all applicable requirements of the criteria of rehabilitation as provided in Section 7591.12.
(c)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 4.Section 7591.10 of the Business and Professions Code, as added by Section 5 of Chapter 291 of the Statutes of 2012, is amended to read:7591.10.(a)The director may deny a license, certificate, or registration regulated by this chapter on the grounds that the applicant has done any of the following:
(1)Knowingly made a false statement of fact required to be revealed in the application for a license.
(2)Been convicted of a crime. A conviction within the meaning of this section means a plea or verdict of guilty or a conviction following a plea of nolo contendere. Any action which the bureau is permitted to take following the establishment of a conviction may be taken when the time for appeal has elapsed, or the judgment of conviction has been affirmed on appeal, or when an order granting probation is made suspending the imposition of sentence, irrespective of a subsequent order under the provisions of Section 1203.4 of the Penal Code.
(3)Done any act involving dishonesty, fraud, or deceit with the intent to substantially benefit himself, herself, or another, or to substantially injure another.
(4)Done any act which if done by a licensee would be grounds for suspension or revocation of a license.
(5)Done any act without a license for which a license is required under this chapter.
(6)Been refused a license under this chapter or had a license revoked.
(7)Been an officer, partner, or manager of any person who has been refused a license under this chapter or whose license has been suspended or revoked.
The bureau may deny a license, certificate, or registration pursuant to this section only if the crime or act is substantially related to the qualifications, functions, or duties of the license, certificate, or registration for which application has been made.
The denial of a license, certificate, or registration shall be in writing and shall describe the basis for the denial. The denial shall inform the applicant that if he or she desires a review by the disciplinary review committee the review shall be requested within 30 days of the issuance of the denial. A review shall be held pursuant to the provisions of Section 7591.19.
(b)Notwithstanding any other provision of this chapter, no person shall be denied a license, certificate, or registration solely on the basis that he or she has been convicted of a felony, if he or she has obtained a certificate of rehabilitation pursuant to Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part 3 of the Penal Code, or solely on the basis that he or she has been convicted of a misdemeanor, if he or she has met all applicable requirements of the criteria of rehabilitation as provided in Section 7591.12.
(c)This section shall become operative on January 1, 2019.
SEC. 5.Section 7593.1 of the Business and Professions Code, as amended by Section 9 of Chapter 291 of the Statutes of 2012, is amended to read:7593.1.(a)Each individual applicant and each qualified manager, partner of a partnership, designated officer of a corporation, and designated officer and managing member of a limited liability company shall submit with the application one personal identification form provided by the chief, upon which shall appear a photograph taken within one year immediately preceding the date of the filing of the application together with two legible sets of fingerprints, one set of which shall be forwarded to the Federal Bureau of Investigation for purposes of a background check, and personal description of each such person, respectively. The identification form shall include residence addresses and employment history for the previous five years.
(b)The bureau may impose a fee not to exceed three dollars ($3) for processing classifiable fingerprint cards submitted by applicants excluding those submitted into an electronic fingerprint system using electronic fingerprint technology.
(c)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 6.Section 7593.1 of the Business and Professions Code, as added by Section 10 of Chapter 291 of the Statutes of 2012, is amended to read:7593.1.(a)Each individual applicant and each qualified manager, partner of a partnership, and designated officer of a corporation shall submit with the application, one personal identification form provided by the chief upon which shall appear a photograph taken within one year immediately preceding the date of the filing of the application together with two legible sets of fingerprints, one set of which shall be forwarded to the Federal Bureau of Investigation for purposes of a background check, and personal description of each such person, respectively. The identification form shall include residence addresses and employment history for the previous five years.
(b)The bureau may impose a fee not to exceed three dollars ($3) for processing classifiable fingerprint cards submitted by applicants excluding those submitted into an electronic fingerprint system using electronic fingerprint technology.
(c)This section shall become operative on January 1, 2019.
SEC. 7.Section 7593.6 of the Business and Professions Code, as amended by Section 12 of Chapter 291 of the Statutes of 2012, is amended to read:7593.6.(a)The director may refuse to issue a license to an applicant pending final disposition of an investigation of criminal activity or of a disciplinary action previously filed against the person or applicant or against a qualified manager, partner, managing member, or officer of the applicant.
(b)A new alarm company operator license, qualified manager certificate, or alarm agent registration shall be subject to payment of any and all fines assessed pursuant to this section and not resolved in accordance with the provisions of this section and payment of all applicable fees.
(c)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 8.Section 7593.6 of the Business and Professions Code, as added by Section 13 of Chapter 291 of the Statutes of 2012, is amended to read:7593.6.(a)The director may refuse to issue a license to an applicant pending final disposition of an investigation of criminal activity or of a disciplinary action previously filed against the person or applicant or against a qualified manager, partner, or officer of the applicant.
(b)A new alarm company operator license, qualified manager certificate, or alarm agent registration shall be subject to payment of any and all fines assessed pursuant to this section and not resolved in accordance with the provisions of this section and payment of all applicable fees.
(c)This section shall become operative on January 1, 2019.
SEC. 9.Section 7593.7 of the Business and Professions Code, as amended by Section 14 of Chapter 291 of the Statutes of 2012, is amended to read:7593.7.(a)The chief shall issue a pocket identification card to the owner, partners, officers, managing members, and qualified manager. The chief shall determine the form and content of the card. A photo identification card will be furnished to any owner, partner, officer, managing member, qualified manager, or branch office manager upon written request and payment of the fee prescribed by this chapter.
(b)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 10.Section 7593.7 of the Business and Professions Code, as added by Section 15 of Chapter 291 of the Statutes of 2012, is amended to read:7593.7.(a)The chief shall issue a pocket identification card to the owner, partners, officers, and qualified manager. The chief shall determine the form and content of the card. A photo identification card will be furnished to any owner, partner, officer, qualified manager, or branch office manager upon written request and payment of the fee prescribed by this chapter.
(b)This section shall become operative on January 1, 2019.
SEC. 11.Section 7594.4 of the Business and Professions Code, as amended by Section 18 of Chapter 291 of the Statutes of 2012, is amended to read:7594.4.(a)Except as herein otherwise provided, no individual shall be in active charge of the business if the individual has ever had a license revoked for cause or has ever been disqualified from further employment in the alarm company operator business pursuant to this chapter, or was a qualified manager, partner, managing member, or officer of a business whose license has been revoked.
(b)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 12.Section 7594.4 of the Business and Professions Code, as added by Section 19 of Chapter 291 of the Statutes of 2012, is amended to read:7594.4.(a)Except as herein otherwise provided, no individual shall be in active charge of the business if the individual has ever had a license revoked for cause or has ever been disqualified from further employment in the alarm company operator business pursuant to this chapter, or was a qualified manager, partner, or officer of a business whose license has been revoked.
(b)This section shall become operative on January 1, 2019.
SEC. 13.Section 7599.32 of the Business and Professions Code, as amended by Section 20 of Chapter 291 of the Statutes of 2012, is amended to read:7599.32.(a)A licensee shall notify the bureau within 30 days of any change of its officers or members required to be named pursuant to Section 7593.4 or 7593.5 and of any addition of a new partner.
(b)Applications, on forms prescribed by the director, shall be submitted by all new officers, managing members, and partners. The director may suspend or revoke a license issued under this chapter if the director determines that the new officer, managing member, or partner has committed any act which constitutes grounds for the denial of a license pursuant to Section 7591.10.
(c)A notice of warning may be issued for the first violation of this section and a fine of twenty-five dollars ($25) for each subsequent violation.
(d)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 14.Section 7599.32 of the Business and Professions Code, as added by Section 21 of Chapter 291 of the Statutes of 2012, is amended to read:7599.32.(a)A licensee shall notify the bureau within 30 days of any change of its officers required to be named pursuant to Section 7593.4 and of any addition of a new partner.
(b)Applications, on forms prescribed by the director, shall be submitted by all new officers and partners. The director may suspend or revoke a license issued under this chapter if the director determines that the new officer or partner has committed any act which constitutes grounds for the denial of a license pursuant to Section 7591.10.
(c)A notice of warning may be issued for the first violation of this section and a fine of twenty-five dollars ($25) for each subsequent violation.
(d)This section shall become operative on January 1, 2019.
SEC. 15.Section 7599.34 of the Business and Professions Code, as amended by Section 22 of Chapter 291 of the Statutes of 2012, is amended to read:7599.34.(a)No licensee shall conduct a business as an individual, partnership, limited liability company, or corporation unless the licensee holds a valid license issued to that exact same individual, partnership, limited liability company, or corporation. A violation of this section may result in a fine of one hundred dollars ($100) for each violation.
(b)As a condition of the issuance, reinstatement, reactivation, or continued valid use of a license under this chapter, a limited liability company shall, in accordance with the provisions of this section, maintain a policy or policies of insurance against liability imposed on or against it by law for damages arising out of claims based upon acts, errors, or omissions arising out of the alarm company services it provides.
(c)The total aggregate limit of liability under the policy or policies of insurance required under this section shall be as follows:
(1)For a limited liability company licensee with five or fewer persons named as managing members pursuant to Section 7593.5 or 7599.32, the aggregate limit shall not be less than one million dollars ($1,000,000).
(2)For a limited liability company licensee with more than five persons named as managing members pursuant to Section 7593.5 or 7599.32, an additional one hundred thousand dollars ($100,000) of insurance shall be obtained for each person named as managing members of the licensee except that the maximum amount of insurance is not required to exceed five million dollars ($5,000,000) in any one designated period, less amounts paid in defending, settling, or discharging claims as set forth under this section.
(d)Prior to the issuance, reinstatement, or reactivation of a limited liability company license as provided under this chapter, the applicant or licensee shall, in the manner prescribed by the bureau, submit the information and documentation required by this section and requested by the bureau, demonstrating compliance with the financial security requirements specified by this section.
(e)For any insurance policy secured by a licensee in satisfaction of this section, a Certificate of Liability Insurance, signed by an authorized agent or employee of the insurer, shall be submitted electronically or otherwise to the bureau. The insurer issuing the certificate shall report to the bureau the following information for any policy required under this section: name, license number, policy number, dates that coverage is scheduled to commence and lapse, the date and amount of any payment of claims, and cancellation date if applicable.
(f)If a licensee fails to maintain sufficient insurance as required by this section, the license is subject to suspension.
(g)Where the license of a limited liability company is suspended pursuant to subdivision (f), each member of the limited liability company shall be personally liable up to one million dollars ($1,000,000) each for damages resulting to third parties in connection with the companys performance, during the period of suspension, of any act or contract where a license is required by this chapter.
(h)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 16.Section 7599.34 of the Business and Professions Code, as added by Section 23 of Chapter 291 of the Statutes of 2012, is amended to read:7599.34.(a)No licensee shall conduct a business as an individual, partnership, or corporation unless the licensee holds a valid license issued to that exact same individual, partnership, or corporation. A violation of this section may result in a fine of one hundred dollars ($100) for each violation.
(b)This section shall become operative on January 1, 2019.
SEC. 17.Section 7599.42 of the Business and Professions Code, as amended by Section 24 of Chapter 291 of the Statutes of 2012, is amended to read:7599.42.(a)Within seven days after any violent incident involving a dangerous weapon that has been caused by or occurred upon a licensee or any officer, partner, managing member, qualified manager, or employee of a licensee, while acting within the course and scope of his or her employment, and that results in bodily injury to any person or death of any person involved in that incident or of any discharge of a weapon, excluding any discharge which occurs on the range, the licensee or his or her manager shall mail or deliver to the chief a detailed report of the incident. The report shall describe fully the circumstances surrounding the incident, any injuries or damages incurred, the identity of all participants, and whether a police investigation was conducted. A violation of this section may result in a fine of twenty-five dollars ($25) for the first violation and one hundred dollars ($100) for each subsequent violation.
(b)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 18.Section 7599.42 of the Business and Professions Code, as added by Section 25 of Chapter 291 of the Statutes of 2012, is amended to read:7599.42.(a)Within seven days after any violent incident involving a dangerous weapon, that has been caused by or occurred upon a licensee or any officer, partner, qualified manager, or employee of a licensee, while acting within the course and scope of his or her employment, and that results in bodily injury to any person or death of any person involved in that incident or of any discharge of a weapon, excluding any discharge which occurs on the range, the licensee or his or her manager shall mail or deliver to the chief a detailed report of the incident. The report shall describe fully the circumstances surrounding the incident, any injuries or damages incurred, the identity of all participants, and whether a police investigation was conducted. A violation of this section may result in a fine of twenty-five dollars ($25) for the first violation and one hundred dollars ($100) for each subsequent violation.
(b)This section shall become operative on January 1, 2019.
SEC. 19.Section 7599.43 of the Business and Professions Code, as amended by Section 26 of Chapter 291 of the Statutes of 2012, is amended to read:7599.43.(a)Within seven days after receiving a final civil court judgment filed against the licensee or any officer, partner, managing member, qualified manager, or employee of a licensee for an amount of more than five hundred dollars ($500) pertaining to any act done within the course and scope of his or her employment that may be in violation of this chapter, the licensee or his or her manager shall mail or deliver to the chief a copy of the judgment. A violation of this section may result in a fine of twenty-five dollars ($25) for the first violation and one hundred dollars ($100) for each subsequent violation.
(b)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 20.Section 7599.43 of the Business and Professions Code, as added by Section 27 of Chapter 291 of the Statutes of 2012, is amended to read:7599.43.(a)Within seven days after receiving a final civil court judgment filed against the licensee or any officer, partner, qualified manager, or employee of a licensee for an amount of more than five hundred dollars ($500) pertaining to any act done within the course and scope of his or her employment that may be in violation of this chapter, the licensee or his or her manager shall mail or deliver to the chief a copy of the judgment. A violation of this section may result in a fine of twenty-five dollars ($25) for the first violation and one hundred dollars ($100) for each subsequent violation.
(b)This section shall become operative on January 1, 2019.
SEC. 21.Section 7599.48 of the Business and Professions Code, as amended by Section 28 of Chapter 291 of the Statutes of 2012, is amended to read:7599.48.(a)No licensee, or officer, partner, managing member, manager, or employee of a licensee, shall knowingly make any false report to his or her employer or client for whom information is being obtained. A violation of this section may result in a fine of one hundred dollars ($100) for the first violation, and five hundred dollars ($500) for each subsequent violation.
(b)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 22.Section 7599.48 of the Business and Professions Code, as added by Section 29 of Chapter 291 of the Statutes of 2012, is amended to read:7599.48.(a)No licensee, or officer, partner, manager, or employee of a licensee, shall knowingly make any false report to his or her employer or client for whom information is being obtained. A violation of this section may result in a fine of one hundred dollars ($100) for the first violation, and five hundred dollars ($500) for each subsequent violation.
(b)This section shall become operative on January 1, 2019.
SEC. 23.Section 7599.61 of the Business and Professions Code, as amended by Section 30 of Chapter 291 of the Statutes of 2012, is amended to read:7599.61.(a)The director may suspend or revoke an alarm company operator license, a qualified manager certificate, an alarm agent registration, or a firearms permit, issued under this chapter, if the director determines that the licensee or his or her manager, if an individual, or if the licensee is a person other than an individual, or his or her employees, that any of its officers, partners, managing members, employees, or its manager, has:
(1)Made any false statement or given any false information in connection with an application for a license or a renewal or reinstatement of a license.
(2)Violated any provisions or committed any prohibited acts of this chapter.
(3)Been convicted of any felony or misdemeanor including illegally using, carrying, or possessing a dangerous weapon.
(4)Committed or permitted any employee to commit any act, while the license was expired, which would be cause for the suspension or revocation of a license, or grounds for the denial of an application for a license.
(5)Committed assault, battery, or kidnapping, or used force or violence on any person, without proper justification.
(6)Violated, or advised, encouraged, or assisted the violation of any court order or injunction in the course of business as a licensee.
(7)Been convicted of a violation of Section 148 of the Penal Code.
(8)Committed any act which is a ground for denial of an application for license under this chapter.
(9)Committed any act prohibited by Chapter 1.5 (commencing with Section 630) of Title 15 of Part 1 of the Penal Code.
(10)Committed any act in the course of the licensees business constituting dishonesty or fraud.
(b)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.
SEC. 24.Section 7599.61 of the Business and Professions Code, as added by Section 31 of Chapter 291 of the Statutes of 2012, is amended to read:7599.61.(a)The director may suspend or revoke an alarm company operator license, a qualified manager certificate, an alarm agent registration, or a firearms permit, issued under this chapter, if the director determines that the licensee or his or her manager, if an individual, or if the licensee is a person other than an individual, or his or her employees, that any of its officers, partners, employees, or its manager, has:
(1)Made any false statement or given any false information in connection with an application for a license or a renewal or reinstatement of a license.
(2)Violated any provisions or committed any prohibited acts of this chapter.
(3)Been convicted of any felony or misdemeanor including illegally using, carrying, or possessing a dangerous weapon.
(4)Committed or permitted any employee to commit any act, while the license was expired, which would be cause for the suspension or revocation of a license, or grounds for the denial of an application for a license.
(5)Committed assault, battery, or kidnapping, or used force or violence on any person, without proper justification.
(6)Violated, or advised, encouraged, or assisted the violation of any court order or injunction in the course of business as a licensee.
(7)Been convicted of a violation of Section 148 of the Penal Code.
(8)Committed any act which is a ground for denial of an application for license under this chapter.
(9)Committed any act prohibited by Chapter 1.5 (commencing with Section 630) of Title 15 of Part 1 of the Penal Code.
(10)Committed any act in the course of the licensees business constituting dishonesty or fraud.
(b)This section shall become operative on January 1, 2019.
SEC. 25.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
The following terms as used in this chapter have the meaning expressed in this article:
(a)Person means any individual, firm, company, association, organization, partnership, limited liability company, or corporation.
(b)Department means the Department of Consumer Affairs.
(c)Director means the Director of Consumer Affairs.
(d)Bureau means the Bureau of Security and Investigative Services.
(e)Chief means the Chief of the Bureau of Security and Investigative Services.
(f)Employer means a person who employs an individual for wages or salary, lists the individual on the employers payroll records, and withholds all legally required deductions and contributions.
(g)Employee means an individual who works for an employer, is listed on the employers payroll records, and is under the employers direction and control.
(h)Employer-employee relationship means an individual who works for another and where the individuals name appears on the payroll records of the employer.
(i)Licensee means a business entity, whether an individual, partnership, limited liability company, or corporation licensed under this chapter.
(j)Qualified manager means an individual who is in active control, management, and direction of the licensees business, and who is in possession of a current and valid qualified managers certificate pursuant to this chapter.
(k)Registrant means any person registered or who has applied for registration under this chapter.
(l)Branch office means any location, other than the principal place of business of the licensee, which is licensed as set forth in Article 11 (commencing with Section 7599.20).
(m)Branch office manager means an individual designated by the qualified manager to manage the licensees branch office and who has met the requirements as set forth in Article 11 (commencing with Section 7599.20).
(n)Alarm system means an assembly of equipment and devices arranged to signal the presence of a hazard requiring urgent attention and to which police are expected to respond.
(o)Alarm agent means a person employed by an alarm company operator whose duties include selling on premises, altering, installing, maintaining, moving, repairing, replacing, servicing, responding, or monitoring an alarm system, or a person who manages or supervises a person employed by an alarm company to perform any of the duties described in this subdivision or any person in training for any of the duties described in this subdivision.
(p)Deadly weapon means and includes any instrument or weapon of the kind commonly known as a blackjack, slungshot, billy, sandclub, sandbag, metal knuckles; any dirk, dagger, pistol, revolver, or any other firearm; any knife having a blade longer than five inches; any razor with an unguarded blade; or any metal pipe or bar used or intended to be used as a club.
(q)Firearms permit means a permit issued by the bureau, pursuant to Article 6 (commencing with Section 7596), to a licensee, a qualified manager, or an alarm agent, to carry an exposed firearm while on duty.
(r)(1)Advertisement means:
(A)Any written or printed communication for the purpose of soliciting, describing, or promoting the licensed business of the licensee, including a brochure, letter, pamphlet, newspaper, periodical, publication, or other writing.
(B)A directory listing caused or permitted by the licensee which indicates his or her licensed activity.
(C)A radio, television, or similar airwave transmission which solicits or promotes the licensed business of the licensee.
(2)Advertisement does not include any of the following:
(A)Any printing or writing used on buildings, vehicles, uniforms, badges, or other property where the purpose of the printing or writing is identification.
(B)Any printing or writing on communications, memoranda, or any other writings used in the ordinary course of business where the sole purpose of the writing is other than the solicitation or promotion of business.
(C)Any printing or writing on novelty objects used in the promotion of the licensees business where the printing of the information required by this chapter would be impractical due to the available area or surface.
(s)Residential sales agreement means and includes an agreement between an alarm company operator and an owner or tenant for the purchase of an alarm system to be utilized in the personal residence of the owner or tenant.
(t)Firearm permit means and includes firearms permit, firearms qualification card, firearms qualification, and firearms qualification permit.
(u)This section shall remain in effect only until January 1,2022, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2022, 2019, deletes or extends that date.
SEC. 2.Section 7590.1 of the Business and Professions Code, as added by Section 3 of Chapter 291 of the Statutes of 2012, is amended to read:7590.1.The following terms as used in this chapter have the meaning expressed in this article:
(a)Person means any individual, firm, company, association, organization, partnership, limited liability company, or corporation.
(b)Department means the Department of Consumer Affairs.
(c)Director means the Director of Consumer Affairs.
(d)Bureau means the Bureau of Security and Investigative Services.
(e)Chief means the Chief of the Bureau of Security and Investigative Services.
(f)Employer means a person who employs an individual for wages or salary, lists the individual on the employers payroll records, and withholds all legally required deductions and contributions.
(g)Employee means an individual who works for an employer, is listed on the employers payroll records, and is under the employers direction and control.
(h)Employer-employee relationship means an individual who works for another and where the individuals name appears on the payroll records of the employer.
(i)Licensee means a business entity, whether an individual, partnership, or corporation licensed under this chapter.
(j)Qualified manager means an individual who is in active control, management, and direction of the licensees business, and who is in possession of a current and valid qualified managers certificate pursuant to this chapter.
(k)Registrant means any person registered or who has applied for registration under this chapter.
(l)Branch office means any location, other than the principal place of business of the licensee, which is licensed as set forth in Article 11 (commencing with Section 7599.20).
(m)Branch office manager means an individual designated by the qualified manager to manage the licensees branch office and who has met the requirements as set forth in Article 11 (commencing with Section 7599.20).
(n)Alarm system means an assembly of equipment and devices arranged to signal the presence of a hazard requiring urgent attention and to which police are expected to respond.
(o)Alarm agent means a person employed by an alarm company operator whose duties include selling on premises, altering, installing, maintaining, moving, repairing, replacing, servicing, responding, or monitoring an alarm system, or a person who manages or supervises a person employed by an alarm company to perform any of the duties described in this subdivision or any person in training for any of the duties described in this subdivision.
(p)Deadly weapon means and includes any instrument or weapon of the kind commonly known as a blackjack, slungshot, billy, sandclub, sandbag, metal knuckles; any dirk, dagger, pistol, revolver, or any other firearm; any knife having a blade longer than five inches; any razor with an unguarded blade; or any metal pipe or bar used or intended to be used as a club.
(q)Firearms permit means a permit issued by the bureau, pursuant to Article 6 (commencing with Section 7596), to a licensee, a qualified manager, or an alarm agent, to carry an exposed firearm while on duty.
(r)(1)Advertisement means:
(A)Any written or printed communication for the purpose of soliciting, describing, or promoting the licensed business of the licensee, including a brochure, letter, pamphlet, newspaper, periodical, publication, or other writing.
(B)A directory listing caused or permitted by the licensee which indicates his or her licensed activity.
(C)A radio, television, or similar airwave transmission which solicits or promotes the licensed business of the licensee.
(2)Advertisement does not include any of the following:
(A)Any printing or writing used on buildings, vehicles, uniforms, badges, or other property where the purpose of the printing or writing is identification.
(B)Any printing or writing on communications, memoranda, or any other writings used in the ordinary course of business where the sole purpose of the writing is other than the solicitation or promotion of business.
(C)Any printing or writing on novelty objects used in the promotion of the licensees business where the printing of the information required by this chapter would be impractical due to the available area or surface.
(s)Residential sales agreement means and includes an agreement between an alarm company operator and an owner or tenant for the purchase of an alarm system to be utilized in the personal residence of the owner or tenant.
(t)Firearm permit means and includes firearms permit, firearms qualification card, firearms qualification, and firearms qualification permit.
(u)This section shall become operative on January 1, 2022. 2019.
SEC. 3.Section 7591.10 of the Business and Professions Code, as amended by Section 4 of Chapter 291 of the Statutes of 2012, is amended to read:7591.10.(a)The director may deny a license, certificate, or registration regulated by this chapter on the grounds that the applicant has done any of the following:
(1)Knowingly made a false statement of fact required to be revealed in the application for a license.
(2)Been convicted of a crime. A conviction within the meaning of this section means a plea or verdict of guilty or a conviction following a plea of nolo contendere. Any action which the bureau is permitted to take following the establishment of a conviction may be taken when the time for appeal has elapsed, or the judgment of conviction has been affirmed on appeal, or when an order granting probation is made suspending the imposition of sentence, irrespective of a subsequent order under the provisions of Section 1203.4 of the Penal Code.
(3)Done any act involving dishonesty, fraud, or deceit with the intent to substantially benefit himself, herself, or another, or to substantially injure another.
(4)Done any act which if done by a licensee would be grounds for suspension or revocation of a license.
(5)Done any act without a license for which a license is required under this chapter.
(6)Been refused a license under this chapter or had a license revoked.
(7)Been an officer, partner, managing member, or manager of any person who has been refused a license under this chapter or whose license has been suspended or revoked.
The bureau may deny a license, certificate, or registration pursuant to this section only if the crime or act is substantially related to the qualifications, functions, or duties of the license, certificate, or registration for which application has been made.
The denial of a license, certificate, or registration shall be in writing and shall describe the basis for the denial. The denial shall inform the applicant that if he or she desires a review by the disciplinary review committee the review shall be requested within 30 days of the issuance of the denial. A review shall be held pursuant to the provisions of Section 7591.19.
(b)Notwithstanding any other provision of this chapter, no person shall be denied a license, certificate, or registration solely on the basis that he or she has been convicted of a felony, if he or she has obtained a certificate of rehabilitation pursuant to Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part 3 of the Penal Code, or solely on the basis that he or she has been convicted of a misdemeanor, if he or she has met all applicable requirements of the criteria of rehabilitation as provided in Section 7591.12.
(c)This section shall remain in effect only until January 1, 2022, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2022, 2019, deletes or extends that date.
SEC. 4.Section 7591.10 of the Business and Professions Code, as added by Section 5 of Chapter 291 of the Statutes of 2012, is amended to read:7591.10.(a)The director may deny a license, certificate, or registration regulated by this chapter on the grounds that the applicant has done any of the following:
(1)Knowingly made a false statement of fact required to be revealed in the application for a license.
(2)Been convicted of a crime. A conviction within the meaning of this section means a plea or verdict of guilty or a conviction following a plea of nolo contendere. Any action which the bureau is permitted to take following the establishment of a conviction may be taken when the time for appeal has elapsed, or the judgment of conviction has been affirmed on appeal, or when an order granting probation is made suspending the imposition of sentence, irrespective of a subsequent order under the provisions of Section 1203.4 of the Penal Code.
(3)Done any act involving dishonesty, fraud, or deceit with the intent to substantially benefit himself, herself, or another, or to substantially injure another.
(4)Done any act which if done by a licensee would be grounds for suspension or revocation of a license.
(5)Done any act without a license for which a license is required under this chapter.
(6)Been refused a license under this chapter or had a license revoked.
(7)Been an officer, partner, or manager of any person who has been refused a license under this chapter or whose license has been suspended or revoked.
The bureau may deny a license, certificate, or registration pursuant to this section only if the crime or act is substantially related to the qualifications, functions, or duties of the license, certificate, or registration for which application has been made.
The denial of a license, certificate, or registration shall be in writing and shall describe the basis for the denial. The denial shall inform the applicant that if he or she desires a review by the disciplinary review committee the review shall be requested within 30 days of the issuance of the denial. A review shall be held pursuant to the provisions of Section 7591.19.
(b)Notwithstanding any other provision of this chapter, no person shall be denied a license, certificate, or registration solely on the basis that he or she has been convicted of a felony, if he or she has obtained a certificate of rehabilitation pursuant to Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part 3 of the Penal Code, or solely on the basis that he or she has been convicted of a misdemeanor, if he or she has met all applicable requirements of the criteria of rehabilitation as provided in Section 7591.12.
(c)This section shall become operative on January 1, 2022. 2019.
SEC. 5.Section 7593.1 of the Business and Professions Code, as amended by Section 9 of Chapter 291 of the Statutes of 2012, is amended to read:7593.1.(a)Each individual applicant and each qualified manager, partner of a partnership, designated officer of a corporation, and designated officer and managing member of a limited liability company shall submit with the application one personal identification form provided by the chief, upon which shall appear a photograph taken within one year immediately preceding the date of the filing of the application together with two legible sets of fingerprints, one set of which shall be forwarded to the Federal Bureau of Investigation for purposes of a background check, and personal description of each such person, respectively. The identification form shall include residence addresses and employment history for the previous five years.
(b)The bureau may impose a fee not to exceed three dollars ($3) for processing classifiable fingerprint cards submitted by applicants excluding those submitted into an electronic fingerprint system using electronic fingerprint technology.
(c)This section shall remain in effect only until January 1, 2022, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2022, 2019, deletes or extends that date.
SEC. 6.Section 7593.1 of the Business and Professions Code, as added by Section 10 of Chapter 291 of the Statutes of 2012, is amended to read:7593.1.(a)Each individual applicant and each qualified manager, partner of a partnership, and designated officer of a corporation shall submit with the application, one personal identification form provided by the chief upon which shall appear a photograph taken within one year immediately preceding the date of the filing of the application together with two legible sets of fingerprints, one set of which shall be forwarded to the Federal Bureau of Investigation for purposes of a background check, and personal description of each such person, respectively. The identification form shall include residence addresses and employment history for the previous five years.
(b)The bureau may impose a fee not to exceed three dollars ($3) for processing classifiable fingerprint cards submitted by applicants excluding those submitted into an electronic fingerprint system using electronic fingerprint technology.
(c)This section shall become operative on January 1, 2022. 2019.
SEC. 7.Section 7593.6 of the Business and Professions Code, as amended by Section 12 of Chapter 291 of the Statutes of 2012, is amended to read:7593.6.(a)The director may refuse to issue a license to an applicant pending final disposition of an investigation of criminal activity or of a disciplinary action previously filed against the person or applicant or against a qualified manager, partner, managing member, or officer of the applicant.
(b)A new alarm company operator license, qualified manager certificate, or alarm agent registration shall be subject to payment of any and all fines assessed pursuant to this section and not resolved in accordance with the provisions of this section and payment of all applicable fees.
(c)This section shall remain in effect only until January 1, 2022, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2022, 2019, deletes or extends that date.
SEC. 8.Section 7593.6 of the Business and Professions Code, as added by Section 13 of Chapter 291 of the Statutes of 2012, is amended to read:7593.6.(a)The director may refuse to issue a license to an applicant pending final disposition of an investigation of criminal activity or of a disciplinary action previously filed against the person or applicant or against a qualified manager, partner, or officer of the applicant.
(b)A new alarm company operator license, qualified manager certificate, or alarm agent registration shall be subject to payment of any and all fines assessed pursuant to this section and not resolved in accordance with the provisions of this section and payment of all applicable fees.
(c)This section shall become operative on January 1, 2022. 2019.
SEC. 9.Section 7593.7 of the Business and Professions Code, as amended by Section 14 of Chapter 291 of the Statutes of 2012, is amended to read:7593.7.(a)The chief shall issue a pocket identification card to the owner, partners, officers, managing members, and qualified manager. The chief shall determine the form and content of the card. A photo identification card will be furnished to any owner, partner, officer, managing member, qualified manager, or branch office manager upon written request and payment of the fee prescribed by this chapter.
(b)This section shall remain in effect only until January 1, 2022, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2022, 2019, deletes or extends that date.
SEC. 10.Section 7593.7 of the Business and Professions Code, as added by Section 15 of Chapter 291 of the Statutes of 2012, is amended to read:7593.7.(a)The chief shall issue a pocket identification card to the owner, partners, officers, and qualified manager. The chief shall determine the form and content of the card. A photo identification card will be furnished to any owner, partner, officer, qualified manager, or branch office manager upon written request and payment of the fee prescribed by this chapter.
(b)This section shall become operative on January 1, 2022. 2019.
SEC. 11.Section 7594.4 of the Business and Professions Code, as amended by Section 18 of Chapter 291 of the Statutes of 2012, is amended to read:7594.4.(a)Except as herein otherwise provided, no individual shall be in active charge of the business if the individual has ever had a license revoked for cause or has ever been disqualified from further employment in the alarm company operator business pursuant to this chapter, or was a qualified manager, partner, managing member, or officer of a business whose license has been revoked.
(b)This section shall remain in effect only until January 1, 2022, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2022, 2019, deletes or extends that date.
SEC. 12.Section 7594.4 of the Business and Professions Code, as added by Section 19 of Chapter 291 of the Statutes of 2012, is amended to read:7594.4.(a)Except as herein otherwise provided, no individual shall be in active charge of the business if the individual has ever had a license revoked for cause or has ever been disqualified from further employment in the alarm company operator business pursuant to this chapter, or was a qualified manager, partner, or officer of a business whose license has been revoked.
(b)This section shall become operative on January 1, 2022. 2019.
SEC. 13.Section 7599.32 of the Business and Professions Code, as amended by Section 20 of Chapter 291 of the Statutes of 2012, is amended to read:7599.32.(a)A licensee shall notify the bureau within 30 days of any change of its officers or members required to be named pursuant to Section 7593.4 or 7593.5 and of any addition of a new partner.
(b)Applications, on forms prescribed by the director, shall be submitted by all new officers, managing members, and partners. The director may suspend or revoke a license issued under this chapter if the director determines that the new officer, managing member, or partner has committed any act which constitutes grounds for the denial of a license pursuant to Section 7591.10.
(c)A notice of warning may be issued for the first violation of this section and a fine of twenty-five dollars ($25) for each subsequent violation.
(d)This section shall remain in effect only until January 1, 2022, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2022, 2019, deletes or extends that date.
SEC. 14.Section 7599.32 of the Business and Professions Code, as added by Section 21 of Chapter 291 of the Statutes of 2012, is amended to read:7599.32.(a)A licensee shall notify the bureau within 30 days of any change of its officers required to be named pursuant to Section 7593.4 and of any addition of a new partner.
(b)Applications, on forms prescribed by the director, shall be submitted by all new officers and partners. The director may suspend or revoke a license issued under this chapter if the director determines that the new officer or partner has committed any act which constitutes grounds for the denial of a license pursuant to Section 7591.10.
(c)A notice of warning may be issued for the first violation of this section and a fine of twenty-five dollars ($25) for each subsequent violation.
(d)This section shall become operative on January 1, 2022. 2019.
SEC. 15.Section 7599.34 of the Business and Professions Code, as amended by Section 22 of Chapter 291 of the Statutes of 2012, is amended to read:7599.34.(a)No licensee shall conduct a business as an individual, partnership, limited liability company, or corporation unless the licensee holds a valid license issued to that exact same individual, partnership, limited liability company, or corporation. A violation of this section may result in a fine of one hundred dollars ($100) for each violation.
(b)As a condition of the issuance, reinstatement, reactivation, or continued valid use of a license under this chapter, a limited liability company shall, in accordance with the provisions of this section, maintain a policy or policies of insurance against liability imposed on or against it by law for damages arising out of claims based upon acts, errors, or omissions arising out of the alarm company services it provides.
(c)The total aggregate limit of liability under the policy or policies of insurance required under this section shall be as follows:
(1)For a limited liability company licensee with five or fewer persons named as managing members pursuant to Section 7593.5 or 7599.32, the aggregate limit shall not be less than one million dollars ($1,000,000).
(2)For a limited liability company licensee with more than five persons named as managing members pursuant to Section 7593.5 or 7599.32, an additional one hundred thousand dollars ($100,000) of insurance shall be obtained for each person named as managing members of the licensee except that the maximum amount of insurance is not required to exceed five million dollars ($5,000,000) in any one designated period, less amounts paid in defending, settling, or discharging claims as set forth under this section.
(d)Prior to the issuance, reinstatement, or reactivation of a limited liability company license as provided under this chapter, the applicant or licensee shall, in the manner prescribed by the bureau, submit the information and documentation required by this section and requested by the bureau, demonstrating compliance with the financial security requirements specified by this section.
(e)For any insurance policy secured by a licensee in satisfaction of this section, a Certificate of Liability Insurance, signed by an authorized agent or employee of the insurer, shall be submitted electronically or otherwise to the bureau. The insurer issuing the certificate shall report to the bureau the following information for any policy required under this section: name, license number, policy number, dates that coverage is scheduled to commence and lapse, the date and amount of any payment of claims, and cancellation date if applicable.
(f)If a licensee fails to maintain sufficient insurance as required by this section, the license is subject to suspension.
(g)Where the license of a limited liability company is suspended pursuant to subdivision (f), each member of the limited liability company shall be personally liable up to one million dollars ($1,000,000) each for damages resulting to third parties in connection with the companys performance, during the period of suspension, of any act or contract where a license is required by this chapter.
(h)This section shall remain in effect only until January 1, 2022, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2022, 2019, deletes or extends that date.
SEC. 16.Section 7599.34 of the Business and Professions Code, as added by Section 23 of Chapter 291 of the Statutes of 2012, is amended to read:7599.34.(a)No licensee shall conduct a business as an individual, partnership, or corporation unless the licensee holds a valid license issued to that exact same individual, partnership, or corporation. A violation of this section may result in a fine of one hundred dollars ($100) for each violation.
(b)This section shall become operative on January 1, 2022. 2019.
SEC. 17.Section 7599.42 of the Business and Professions Code, as amended by Section 24 of Chapter 291 of the Statutes of 2012, is amended to read:7599.42.(a)Within seven days after any violent incident involving a dangerous weapon that has been caused by or occurred upon a licensee or any officer, partner, managing member, qualified manager, or employee of a licensee, while acting within the course and scope of his or her employment, and that results in bodily injury to any person or death of any person involved in that incident or of any discharge of a weapon, excluding any discharge which occurs on the range, the licensee or his or her manager shall mail or deliver to the chief a detailed report of the incident. The report shall describe fully the circumstances surrounding the incident, any injuries or damages incurred, the identity of all participants, and whether a police investigation was conducted. A violation of this section may result in a fine of twenty-five dollars ($25) for the first violation and one hundred dollars ($100) for each subsequent violation.
(b)This section shall remain in effect only until January 1, 2022, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2022, 2019, deletes or extends that date.
SEC. 18.Section 7599.42 of the Business and Professions Code, as added by Section 25 of Chapter 291 of the Statutes of 2012, is amended to read:7599.42.(a)Within seven days after any violent incident involving a dangerous weapon, that has been caused by or occurred upon a licensee or any officer, partner, qualified manager, or employee of a licensee, while acting within the course and scope of his or her employment, and that results in bodily injury to any person or death of any person involved in that incident or of any discharge of a weapon, excluding any discharge which occurs on the range, the licensee or his or her manager shall mail or deliver to the chief a detailed report of the incident. The report shall describe fully the circumstances surrounding the incident, any injuries or damages incurred, the identity of all participants, and whether a police investigation was conducted. A violation of this section may result in a fine of twenty-five dollars ($25) for the first violation and one hundred dollars ($100) for each subsequent violation.
(b)This section shall become operative on January 1, 2022. 2019.
SEC. 19.Section 7599.43 of the Business and Professions Code, as amended by Section 26 of Chapter 291 of the Statutes of 2012, is amended to read:7599.43.(a)Within seven days after receiving a final civil court judgment filed against the licensee or any officer, partner, managing member, qualified manager, or employee of a licensee for an amount of more than five hundred dollars ($500) pertaining to any act done within the course and scope of his or her employment that may be in violation of this chapter, the licensee or his or her manager shall mail or deliver to the chief a copy of the judgment. A violation of this section may result in a fine of twenty-five dollars ($25) for the first violation and one hundred dollars ($100) for each subsequent violation.
(b)This section shall remain in effect only until January 1, 2022, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2022, 2019, deletes or extends that date.
SEC. 20.Section 7599.43 of the Business and Professions Code, as added by Section 27 of Chapter 291 of the Statutes of 2012, is amended to read:7599.43.(a)Within seven days after receiving a final civil court judgment filed against the licensee or any officer, partner, qualified manager, or employee of a licensee for an amount of more than five hundred dollars ($500) pertaining to any act done within the course and scope of his or her employment that may be in violation of this chapter, the licensee or his or her manager shall mail or deliver to the chief a copy of the judgment. A violation of this section may result in a fine of twenty-five dollars ($25) for the first violation and one hundred dollars ($100) for each subsequent violation.
(b)This section shall become operative on January 1, 2022. 2019.
SEC. 21.Section 7599.48 of the Business and Professions Code, as amended by Section 28 of Chapter 291 of the Statutes of 2012, is amended to read:7599.48.(a)No licensee, or officer, partner, managing member, manager, or employee of a licensee, shall knowingly make any false report to his or her employer or client for whom information is being obtained. A violation of this section may result in a fine of one hundred dollars ($100) for the first violation, and five hundred dollars ($500) for each subsequent violation.
(b)This section shall remain in effect only until January 1, 2022, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2022, 2019, deletes or extends that date.
SEC. 22.Section 7599.48 of the Business and Professions Code, as added by Section 29 of Chapter 291 of the Statutes of 2012, is amended to read:7599.48.(a)No licensee, or officer, partner, manager, or employee of a licensee, shall knowingly make any false report to his or her employer or client for whom information is being obtained. A violation of this section may result in a fine of one hundred dollars ($100) for the first violation, and five hundred dollars ($500) for each subsequent violation.
(b)This section shall become operative on January 1, 2022. 2019.
SEC. 23.Section 7599.61 of the Business and Professions Code, as amended by Section 30 of Chapter 291 of the Statutes of 2012, is amended to read:7599.61.(a)The director may suspend or revoke an alarm company operator license, a qualified manager certificate, an alarm agent registration, or a firearms permit, issued under this chapter, if the director determines that the licensee or his or her manager, if an individual, or if the licensee is a person other than an individual, or his or her employees, that any of its officers, partners, managing members, employees, or its manager, has:
(1)Made any false statement or given any false information in connection with an application for a license or a renewal or reinstatement of a license.
(2)Violated any provisions or committed any prohibited acts of this chapter.
(3)Been convicted of any felony or misdemeanor including illegally using, carrying, or possessing a dangerous weapon.
(4)Committed or permitted any employee to commit any act, while the license was expired, which would be cause for the suspension or revocation of a license, or grounds for the denial of an application for a license.
(5)Committed assault, battery, or kidnapping, or used force or violence on any person, without proper justification.
(6)Violated, or advised, encouraged, or assisted the violation of any court order or injunction in the course of business as a licensee.
(7)Been convicted of a violation of Section 148 of the Penal Code.
(8)Committed any act which is a ground for denial of an application for license under this chapter.
(9)Committed any act prohibited by Chapter 1.5 (commencing with Section 630) of Title 15 of Part 1 of the Penal Code.
(10)Committed any act in the course of the licensees business constituting dishonesty or fraud.
(b)This section shall remain in effect only until January 1, 2022, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2022, 2019, deletes or extends that date.
SEC. 24.Section 7599.61 of the Business and Professions Code, as added by Section 31 of Chapter 291 of the Statutes of 2012, is amended to read:7599.61.(a)The director may suspend or revoke an alarm company operator license, a qualified manager certificate, an alarm agent registration, or a firearms permit, issued under this chapter, if the director determines that the licensee or his or her manager, if an individual, or if the licensee is a person other than an individual, or his or her employees, that any of its officers, partners, employees, or its manager, has:
(1)Made any false statement or given any false information in connection with an application for a license or a renewal or reinstatement of a license.
(2)Violated any provisions or committed any prohibited acts of this chapter.
(3)Been convicted of any felony or misdemeanor including illegally using, carrying, or possessing a dangerous weapon.
(4)Committed or permitted any employee to commit any act, while the license was expired, which would be cause for the suspension or revocation of a license, or grounds for the denial of an application for a license.
(5)Committed assault, battery, or kidnapping, or used force or violence on any person, without proper justification.
(6)Violated, or advised, encouraged, or assisted the violation of any court order or injunction in the course of business as a licensee.
(7)Been convicted of a violation of Section 148 of the Penal Code.
(8)Committed any act which is a ground for denial of an application for license under this chapter.
(9)Committed any act prohibited by Chapter 1.5 (commencing with Section 630) of Title 15 of Part 1 of the Penal Code.
(10)Committed any act in the course of the licensees business constituting dishonesty or fraud.
(b)This section shall become operative on January 1, 2022. 2019.
SEC. 25.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
The following terms as used in this chapter have the meaning expressed in this article:
(a)Person means any individual, firm, company, association, organization, partnership, limited liability company, or corporation.
(b)Department means the Department of Consumer Affairs.
(c)Director means the Director of Consumer Affairs.
(d)Bureau means the Bureau of Security and Investigative Services.
(e)Chief means the Chief of the Bureau of Security and Investigative Services.
(f)Employer means a person who employs an individual for wages or salary, lists the individual on the employers payroll records, and withholds all legally required deductions and contributions.
(g)Employee means an individual who works for an employer, is listed on the employers payroll records, and is under the employers direction and control.
(h)Employer-employee relationship means an individual who works for another and where the individuals name appears on the payroll records of the employer.
(i)Licensee means a business entity, whether an individual, partnership, limited liability company, or corporation licensed under this chapter.
(j)Qualified manager means an individual who is in active control, management, and direction of the licensees business, and who is in possession of a current and valid qualified managers certificate pursuant to this chapter.
(k)Registrant means any person registered or who has applied for registration under this chapter.
(l)Branch office means any location, other than the principal place of business of the licensee, which is licensed as set forth in Article 11 (commencing with Section 7599.20).
(m)Branch office manager means an individual designated by the qualified manager to manage the licensees branch office and who has met the requirements as set forth in Article 11 (commencing with Section 7599.20).
(n)Alarm system means an assembly of equipment and devices arranged to signal the presence of a hazard requiring urgent attention and to which police are expected to respond.
(o)Alarm agent means a person employed by an alarm company operator whose duties include selling on premises, altering, installing, maintaining, moving, repairing, replacing, servicing, responding, or monitoring an alarm system, or a person who manages or supervises a person employed by an alarm company to perform any of the duties described in this subdivision or any person in training for any of the duties described in this subdivision.
(p)Deadly weapon means and includes any instrument or weapon of the kind commonly known as a blackjack, slungshot, billy, sandclub, sandbag, metal knuckles; any dirk, dagger, pistol, revolver, or any other firearm; any knife having a blade longer than five inches; any razor with an unguarded blade; or any metal pipe or bar used or intended to be used as a club.
(q)Firearms permit means a permit issued by the bureau, pursuant to Article 6 (commencing with Section 7596), to a licensee, a qualified manager, or an alarm agent, to carry an exposed firearm while on duty.
(r)(1)Advertisement means:
(A)Any written or printed communication for the purpose of soliciting, describing, or promoting the licensed business of the licensee, including a brochure, letter, pamphlet, newspaper, periodical, publication, or other writing.
(B)A directory listing caused or permitted by the licensee which indicates his or her licensed activity.
(C)A radio, television, or similar airwave transmission which solicits or promotes the licensed business of the licensee.
(2)Advertisement does not include any of the following:
(A)Any printing or writing used on buildings, vehicles, uniforms, badges, or other property where the purpose of the printing or writing is identification.
(B)Any printing or writing on communications, memoranda, or any other writings used in the ordinary course of business where the sole purpose of the writing is other than the solicitation or promotion of business.
(C)Any printing or writing on novelty objects used in the promotion of the licensees business where the printing of the information required by this chapter would be impractical due to the available area or surface.
(s)Residential sales agreement means and includes an agreement between an alarm company operator and an owner or tenant for the purchase of an alarm system to be utilized in the personal residence of the owner or tenant.
(t)Firearm permit means and includes firearms permit, firearms qualification card, firearms qualification, and firearms qualification permit.
(u)This section shall remain in effect only until January 1, 2016, 2022, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2016, 2022, deletes or extends that date.
SEC. 2.Section 7590.1 of the Business and Professions Code, as added by Section 3 of Chapter 291 of the Statutes of 2012, is amended to read:7590.1.The following terms as used in this chapter have the meaning expressed in this article:
(a)Person means any individual, firm, company, association, organization, partnership, limited liability company, or corporation.
(b)Department means the Department of Consumer Affairs.
(c)Director means the Director of Consumer Affairs.
(d)Bureau means the Bureau of Security and Investigative Services.
(e)Chief means the Chief of the Bureau of Security and Investigative Services.
(f)Employer means a person who employs an individual for wages or salary, lists the individual on the employers payroll records, and withholds all legally required deductions and contributions.
(g)Employee means an individual who works for an employer, is listed on the employers payroll records, and is under the employers direction and control.
(h)Employer-employee relationship means an individual who works for another and where the individuals name appears on the payroll records of the employer.
(i)Licensee means a business entity, whether an individual, partnership, or corporation licensed under this chapter.
(j)Qualified manager means an individual who is in active control, management, and direction of the licensees business, and who is in possession of a current and valid qualified managers certificate pursuant to this chapter.
(k)Registrant means any person registered or who has applied for registration under this chapter.
(l)Branch office means any location, other than the principal place of business of the licensee, which is licensed as set forth in Article 11 (commencing with Section 7599.20).
(m)Branch office manager means an individual designated by the qualified manager to manage the licensees branch office and who has met the requirements as set forth in Article 11 (commencing with Section 7599.20).
(n)Alarm system means an assembly of equipment and devices arranged to signal the presence of a hazard requiring urgent attention and to which police are expected to respond.
(o)Alarm agent means a person employed by an alarm company operator whose duties include selling on premises, altering, installing, maintaining, moving, repairing, replacing, servicing, responding, or monitoring an alarm system, or a person who manages or supervises a person employed by an alarm company to perform any of the duties described in this subdivision or any person in training for any of the duties described in this subdivision.
(p)Deadly weapon means and includes any instrument or weapon of the kind commonly known as a blackjack, slungshot, billy, sandclub, sandbag, metal knuckles; any dirk, dagger, pistol, revolver, or any other firearm; any knife having a blade longer than five inches; any razor with an unguarded blade; or any metal pipe or bar used or intended to be used as a club.
(q)Firearms permit means a permit issued by the bureau, pursuant to Article 6 (commencing with Section 7596), to a licensee, a qualified manager, or an alarm agent, to carry an exposed firearm while on duty.
(r)(1)Advertisement means:
(A)Any written or printed communication for the purpose of soliciting, describing, or promoting the licensed business of the licensee, including a brochure, letter, pamphlet, newspaper, periodical, publication, or other writing.
(B)A directory listing caused or permitted by the licensee which indicates his or her licensed activity.
(C)A radio, television, or similar airwave transmission which solicits or promotes the licensed business of the licensee.
(2)Advertisement does not include any of the following:
(A)Any printing or writing used on buildings, vehicles, uniforms, badges, or other property where the purpose of the printing or writing is identification.
(B)Any printing or writing on communications, memoranda, or any other writings used in the ordinary course of business where the sole purpose of the writing is other than the solicitation or promotion of business.
(C)Any printing or writing on novelty objects used in the promotion of the licensees business where the printing of the information required by this chapter would be impractical due to the available area or surface.
(s)Residential sales agreement means and includes an agreement between an alarm company operator and an owner or tenant for the purchase of an alarm system to be utilized in the personal residence of the owner or tenant.
(t)Firearm permit means and includes firearms permit, firearms qualification card, firearms qualification, and firearms qualification permit.
(u)This section shall become operative on January 1, 2016. 2022.
SEC. 3.Section 7591.10 of the Business and Professions Code, as amended by Section 4 of Chapter 291 of the Statutes of 2012, is amended to read:7591.10.(a)The director may deny a license, certificate, or registration regulated by this chapter on the grounds that the applicant has done any of the following:
(1)Knowingly made a false statement of fact required to be revealed in the application for a license.
(2)Been convicted of a crime. A conviction within the meaning of this section means a plea or verdict of guilty or a conviction following a plea of nolo contendere. Any action which the bureau is permitted to take following the establishment of a conviction may be taken when the time for appeal has elapsed, or the judgment of conviction has been affirmed on appeal, or when an order granting probation is made suspending the imposition of sentence, irrespective of a subsequent order under the provisions of Section 1203.4 of the Penal Code.
(3)Done any act involving dishonesty, fraud, or deceit with the intent to substantially benefit himself, herself, or another, or to substantially injure another.
(4)Done any act which if done by a licensee would be grounds for suspension or revocation of a license.
(5)Done any act without a license for which a license is required under this chapter.
(6)Been refused a license under this chapter or had a license revoked.
(7)Been an officer, partner, managing member, or manager of any person who has been refused a license under this chapter or whose license has been suspended or revoked.
The bureau may deny a license, certificate, or registration pursuant to this section only if the crime or act is substantially related to the qualifications, functions, or duties of the license, certificate, or registration for which application has been made.
The denial of a license, certificate, or registration shall be in writing and shall describe the basis for the denial. The denial shall inform the applicant that if he or she desires a review by the disciplinary review committee the review shall be requested within 30 days of the issuance of the denial. A review shall be held pursuant to the provisions of Section 7591.19.
(b)Notwithstanding any other provision of this chapter, no person shall be denied a license, certificate, or registration solely on the basis that he or she has been convicted of a felony, if he or she has obtained a certificate of rehabilitation pursuant to Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part 3 of the Penal Code, or solely on the basis that he or she has been convicted of a misdemeanor, if he or she has met all applicable requirements of the criteria of rehabilitation as provided in Section 7591.12.
(c)This section shall remain in effect only until January 1, 2016, 2022, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2016, 2022, deletes or extends that date.
SEC. 4.Section 7591.10 of the Business and Professions Code, as added by Section 5 of Chapter 291 of the Statutes of 2012, is amended to read:7591.10.(a)The director may deny a license, certificate, or registration regulated by this chapter on the grounds that the applicant has done any of the following:
(1)Knowingly made a false statement of fact required to be revealed in the application for a license.
(2)Been convicted of a crime. A conviction within the meaning of this section means a plea or verdict of guilty or a conviction following a plea of nolo contendere. Any action which the bureau is permitted to take following the establishment of a conviction may be taken when the time for appeal has elapsed, or the judgment of conviction has been affirmed on appeal, or when an order granting probation is made suspending the imposition of sentence, irrespective of a subsequent order under the provisions of Section 1203.4 of the Penal Code.
(3)Done any act involving dishonesty, fraud, or deceit with the intent to substantially benefit himself, herself, or another, or to substantially injure another.
(4)Done any act which if done by a licensee would be grounds for suspension or revocation of a license.
(5)Done any act without a license for which a license is required under this chapter.
(6)Been refused a license under this chapter or had a license revoked.
(7)Been an officer, partner, or manager of any person who has been refused a license under this chapter or whose license has been suspended or revoked.
The bureau may deny a license, certificate, or registration pursuant to this section only if the crime or act is substantially related to the qualifications, functions, or duties of the license, certificate, or registration for which application has been made.
The denial of a license, certificate, or registration shall be in writing and shall describe the basis for the denial. The denial shall inform the applicant that if he or she desires a review by the disciplinary review committee the review shall be requested within 30 days of the issuance of the denial. A review shall be held pursuant to the provisions of Section 7591.19.
(b)Notwithstanding any other provision of this chapter, no person shall be denied a license, certificate, or registration solely on the basis that he or she has been convicted of a felony, if he or she has obtained a certificate of rehabilitation pursuant to Chapter 3.5 (commencing with Section 4852.01) of Title 6 of Part 3 of the Penal Code, or solely on the basis that he or she has been convicted of a misdemeanor, if he or she has met all applicable requirements of the criteria of rehabilitation as provided in Section 7591.12.
(c)This section shall become operative on January 1, 2016. 2022.
SEC. 5.Section 7593.1 of the Business and Professions Code, as amended by Section 9 of Chapter 291 of the Statutes of 2012, is amended to read:7593.1.(a)Each individual applicant and each qualified manager, partner of a partnership, designated officer of a corporation, and designated officer and managing member of a limited liability company shall submit with the application one personal identification form provided by the chief, upon which shall appear a photograph taken within one year immediately preceding the date of the filing of the application together with two legible sets of fingerprints, one set of which shall be forwarded to the Federal Bureau of Investigation for purposes of a background check, and personal description of each such person, respectively. The identification form shall include residence addresses and employment history for the previous five years.
(b)The bureau may impose a fee not to exceed three dollars ($3) for processing classifiable fingerprint cards submitted by applicants excluding those submitted into an electronic fingerprint system using electronic fingerprint technology.
(c)This section shall remain in effect only until January 1, 2016, 2022, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2016, 2022, deletes or extends that date.
SEC. 6.Section 7593.1 of the Business and Professions Code, as added by Section 10 of Chapter 291 of the Statutes of 2012, is amended to read:7593.1.(a)Each individual applicant and each qualified manager, partner of a partnership, and designated officer of a corporation shall submit with the application, one personal identification form provided by the chief upon which shall appear a photograph taken within one year immediately preceding the date of the filing of the application together with two legible sets of fingerprints, one set of which shall be forwarded to the Federal Bureau of Investigation for purposes of a background check, and personal description of each such person, respectively. The identification form shall include residence addresses and employment history for the previous five years.
(b)The bureau may impose a fee not to exceed three dollars ($3) for processing classifiable fingerprint cards submitted by applicants excluding those submitted into an electronic fingerprint system using electronic fingerprint technology.
(c)This section shall become operative on January 1, 2016. 2022.
SEC. 7.Section 7593.6 of the Business and Professions Code, as amended by Section 12 of Chapter 291 of the Statutes of 2012, is amended to read:7593.6.(a)The director may refuse to issue a license to an applicant pending final disposition of an investigation of criminal activity or of a disciplinary action previously filed against the person or applicant or against a qualified manager, partner, managing member, or officer of the applicant.
(b)A new alarm company operator license, qualified manager certificate, or alarm agent registration shall be subject to payment of any and all fines assessed pursuant to this section and not resolved in accordance with the provisions of this section and payment of all applicable fees.
(c)This section shall remain in effect only until January 1, 2016, 2022, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2016, 2022, deletes or extends that date.
SEC. 8.Section 7593.6 of the Business and Professions Code, as added by Section 13 of Chapter 291 of the Statutes of 2012, is amended to read:7593.6.(a)The director may refuse to issue a license to an applicant pending final disposition of an investigation of criminal activity or of a disciplinary action previously filed against the person or applicant or against a qualified manager, partner, or officer of the applicant.
(b)A new alarm company operator license, qualified manager certificate, or alarm agent registration shall be subject to payment of any and all fines assessed pursuant to this section and not resolved in accordance with the provisions of this section and payment of all applicable fees.
(c)This section shall become operative on January 1, 2016. 2022.
SEC. 9.Section 7593.7 of the Business and Professions Code, as amended by Section 14 of Chapter 291 of the Statutes of 2012, is amended to read:7593.7.(a)The chief shall issue a pocket identification card to the owner, partners, officers, managing members, and qualified manager. The chief shall determine the form and content of the card. A photo identification card will be furnished to any owner, partner, officer, managing member, qualified manager, or branch office manager upon written request and payment of the fee prescribed by this chapter.
(b)This section shall remain in effect only until January 1, 2016, 2022, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2016, 2022, deletes or extends that date.
SEC. 10.Section 7593.7 of the Business and Professions Code, as added by Section 15 of Chapter 291 of the Statutes of 2012, is amended to read:7593.7.(a)The chief shall issue a pocket identification card to the owner, partners, officers, and qualified manager. The chief shall determine the form and content of the card. A photo identification card will be furnished to any owner, partner, officer, qualified manager, or branch office manager upon written request and payment of the fee prescribed by this chapter.
(b)This section shall become operative on January 1, 2016. 2022.
SEC. 11.Section 7594.4 of the Business and Professions Code, as amended by Section 18 of Chapter 291 of the Statutes of 2012, is amended to read:7594.4.(a)Except as herein otherwise provided, no individual shall be in active charge of the business if the individual has ever had a license revoked for cause or has ever been disqualified from further employment in the alarm company operator business pursuant to this chapter, or was a qualified manager, partner, managing member, or officer of a business whose license has been revoked.
(b)This section shall remain in effect only until January 1, 2016, 2022, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2016, 2022, deletes or extends that date.
SEC. 12.Section 7594.4 of the Business and Professions Code, as added by Section 19 of Chapter 291 of the Statutes of 2012, is amended to read:7594.4.(a)Except as herein otherwise provided, no individual shall be in active charge of the business if the individual has ever had a license revoked for cause or has ever been disqualified from further employment in the alarm company operator business pursuant to this chapter, or was a qualified manager, partner, or officer of a business whose license has been revoked.
(b)This section shall become operative on January 1, 2016. 2022.
SEC. 13.Section 7599.32 of the Business and Professions Code, as amended by Section 20 of Chapter 291 of the Statutes of 2012, is amended to read:7599.32.(a)A licensee shall notify the bureau within 30 days of any change of its officers or members required to be named pursuant to Section 7593.4 or 7593.5 and of any addition of a new partner.
(b)Applications, on forms prescribed by the director, shall be submitted by all new officers, managing members, and partners. The director may suspend or revoke a license issued under this chapter if the director determines that the new officer, managing member, or partner has committed any act which constitutes grounds for the denial of a license pursuant to Section 7591.10.
(c)A notice of warning may be issued for the first violation of this section and a fine of twenty-five dollars ($25) for each subsequent violation.
(d)This section shall remain in effect only until January 1, 2016, 2022, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2016, 2022, deletes or extends that date.
SEC. 14.Section 7599.32 of the Business and Professions Code, as added by Section 21 of Chapter 291 of the Statutes of 2012, is amended to read:7599.32.(a)A licensee shall notify the bureau within 30 days of any change of its officers required to be named pursuant to Section 7593.4 and of any addition of a new partner.
(b)Applications, on forms prescribed by the director, shall be submitted by all new officers and partners. The director may suspend or revoke a license issued under this chapter if the director determines that the new officer or partner has committed any act which constitutes grounds for the denial of a license pursuant to Section 7591.10.
(c)A notice of warning may be issued for the first violation of this section and a fine of twenty-five dollars ($25) for each subsequent violation.
(d)This section shall become operative on January 1, 2016. 2022.
SEC. 15.Section 7599.34 of the Business and Professions Code, as amended by Section 22 of Chapter 291 of the Statutes of 2012, is amended to read:7599.34.(a)No licensee shall conduct a business as an individual, partnership, limited liability company, or corporation unless the licensee holds a valid license issued to that exact same individual, partnership, limited liability company, or corporation. A violation of this section may result in a fine of one hundred dollars ($100) for each violation.
(b)As a condition of the issuance, reinstatement, reactivation, or continued valid use of a license under this chapter, a limited liability company shall, in accordance with the provisions of this section, maintain a policy or policies of insurance against liability imposed on or against it by law for damages arising out of claims based upon acts, errors, or omissions arising out of the alarm company services it provides.
(c)The total aggregate limit of liability under the policy or policies of insurance required under this section shall be as follows:
(1)For a limited liability company licensee with five or fewer persons named as managing members pursuant to Section 7593.5 or 7599.32, the aggregate limit shall not be less than one million dollars ($1,000,000).
(2)For a limited liability company licensee with more than five persons named as managing members pursuant to Section 7593.5 or 7599.32, an additional one hundred thousand dollars ($100,000) of insurance shall be obtained for each person named as managing members of the licensee except that the maximum amount of insurance is not required to exceed five million dollars ($5,000,000) in any one designated period, less amounts paid in defending, settling, or discharging claims as set forth under this section.
(d)Prior to the issuance, reinstatement, or reactivation of a limited liability company license as provided under this chapter, the applicant or licensee shall, in the manner prescribed by the bureau, submit the information and documentation required by this section and requested by the bureau, demonstrating compliance with the financial security requirements specified by this section.
(e)For any insurance policy secured by a licensee in satisfaction of this section, a Certificate of Liability Insurance, signed by an authorized agent or employee of the insurer, shall be submitted electronically or otherwise to the bureau. The insurer issuing the certificate shall report to the bureau the following information for any policy required under this section: name, license number, policy number, dates that coverage is scheduled to commence and lapse, the date and amount of any payment of claims, and cancellation date if applicable.
(f)If a licensee fails to maintain sufficient insurance as required by this section, the license is subject to suspension.
(g)Where the license of a limited liability company is suspended pursuant to subdivision (f), each member of the limited liability company shall be personally liable up to one million dollars ($1,000,000) each for damages resulting to third parties in connection with the companys performance, during the period of suspension, of any act or contract where a license is required by this chapter.
(h)This section shall remain in effect only until January 1, 2016, 2022, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2016, 2022, deletes or extends that date.
SEC. 16.Section 7599.34 of the Business and Professions Code, as added by Section 23 of Chapter 291 of the Statutes of 2012, is amended to read:7599.34.(a)No licensee shall conduct a business as an individual, partnership, or corporation unless the licensee holds a valid license issued to that exact same individual, partnership, or corporation. A violation of this section may result in a fine of one hundred dollars ($100) for each violation.
(b)This section shall become operative on January 1, 2016. 2022.
SEC. 17.Section 7599.42 of the Business and Professions Code, as amended by Section 24 of Chapter 291 of the Statutes of 2012, is amended to read:7599.42.(a)Within seven days after any violent incident involving a dangerous weapon that has been caused by or occurred upon a licensee or any officer, partner, managing member, qualified manager, or employee of a licensee, while acting within the course and scope of his or her employment, and that results in bodily injury to any person or death of any person involved in that incident or of any discharge of a weapon, excluding any discharge which occurs on the range, the licensee or his or her manager shall mail or deliver to the chief a detailed report of the incident. The report shall describe fully the circumstances surrounding the incident, any injuries or damages incurred, the identity of all participants, and whether a police investigation was conducted. A violation of this section may result in a fine of twenty-five dollars ($25) for the first violation and one hundred dollars ($100) for each subsequent violation.
(b)This section shall remain in effect only until January 1, 2016, 2022, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2016, 2022, deletes or extends that date.
SEC. 18.Section 7599.42 of the Business and Professions Code, as added by Section 25 of Chapter 291 of the Statutes of 2012, is amended to read:7599.42.(a)Within seven days after any violent incident involving a dangerous weapon, that has been caused by or occurred upon a licensee or any officer, partner, qualified manager, or employee of a licensee, while acting within the course and scope of his or her employment, and that results in bodily injury to any person or death of any person involved in that incident or of any discharge of a weapon, excluding any discharge which occurs on the range, the licensee or his or her manager shall mail or deliver to the chief a detailed report of the incident. The report shall describe fully the circumstances surrounding the incident, any injuries or damages incurred, the identity of all participants, and whether a police investigation was conducted. A violation of this section may result in a fine of twenty-five dollars ($25) for the first violation and one hundred dollars ($100) for each subsequent violation.
(b)This section shall become operative on January 1, 2016. 2022.
SEC. 19.Section 7599.43 of the Business and Professions Code, as amended by Section 26 of Chapter 291 of the Statutes of 2012, is amended to read:7599.43.(a)Within seven days after receiving a final civil court judgment filed against the licensee or any officer, partner, managing member, qualified manager, or employee of a licensee for an amount of more than five hundred dollars ($500) pertaining to any act done within the course and scope of his or her employment that may be in violation of this chapter, the licensee or his or her manager shall mail or deliver to the chief a copy of the judgment. A violation of this section may result in a fine of twenty-five dollars ($25) for the first violation and one hundred dollars ($100) for each subsequent violation.
(b)This section shall remain in effect only until January 1, 2016, 2022, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2016, 2022, deletes or extends that date.
SEC. 20.Section 7599.43 of the Business and Professions Code, as added by Section 27 of Chapter 291 of the Statutes of 2012, is amended to read:7599.43.(a)Within seven days after receiving a final civil court judgment filed against the licensee or any officer, partner, qualified manager, or employee of a licensee for an amount of more than five hundred dollars ($500) pertaining to any act done within the course and scope of his or her employment that may be in violation of this chapter, the licensee or his or her manager shall mail or deliver to the chief a copy of the judgment. A violation of this section may result in a fine of twenty-five dollars ($25) for the first violation and one hundred dollars ($100) for each subsequent violation.
(b)This section shall become operative on January 1, 2016. 2022.
SEC. 21.Section 7599.48 of the Business and Professions Code, as amended by Section 28 of Chapter 291 of the Statutes of 2012, is amended to read:7599.48.(a)No licensee, or officer, partner, managing member, manager, or employee of a licensee, shall knowingly make any false report to his or her employer or client for whom information is being obtained. A violation of this section may result in a fine of one hundred dollars ($100) for the first violation, and five hundred dollars ($500) for each subsequent violation.
(b)This section shall remain in effect only until January 1, 2016, 2022, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2016, 2022, deletes or extends that date.
SEC. 22.Section 7599.48 of the Business and Professions Code, as added by Section 29 of Chapter 291 of the Statutes of 2012, is amended to read:7599.48.(a)No licensee, or officer, partner, manager, or employee of a licensee, shall knowingly make any false report to his or her employer or client for whom information is being obtained. A violation of this section may result in a fine of one hundred dollars ($100) for the first violation, and five hundred dollars ($500) for each subsequent violation.
(b)This section shall become operative on January 1, 2016. 2022.
SEC. 23.Section 7599.61 of the Business and Professions Code, as amended by Section 30 of Chapter 291 of the Statutes of 2012, is amended to read:7599.61.(a)The director may suspend or revoke an alarm company operator license, a qualified manager certificate, an alarm agent registration, or a firearms permit, issued under this chapter, if the director determines that the licensee or his or her manager, if an individual, or if the licensee is a person other than an individual, or his or her employees, that any of its officers, partners, managing members, employees, or its manager, has:
(1)Made any false statement or given any false information in connection with an application for a license or a renewal or reinstatement of a license.
(2)Violated any provisions or committed any prohibited acts of this chapter.
(3)Been convicted of any felony or misdemeanor including illegally using, carrying, or possessing a dangerous weapon.
(4)Committed or permitted any employee to commit any act, while the license was expired, which would be cause for the suspension or revocation of a license, or grounds for the denial of an application for a license.
(5)Committed assault, battery, or kidnapping, or used force or violence on any person, without proper justification.
(6)Violated, or advised, encouraged, or assisted the violation of any court order or injunction in the course of business as a licensee.
(7)Been convicted of a violation of Section 148 of the Penal Code.
(8)Committed any act which is a ground for denial of an application for license under this chapter.
(9)Committed any act prohibited by Chapter 1.5 (commencing with Section 630) of Title 15 of Part 1 of the Penal Code.
(10)Committed any act in the course of the licensees business constituting dishonesty or fraud.
(b)This section shall remain in effect only until January 1, 2016, 2022, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2016, 2022, deletes or extends that date.
SEC. 24.Section 7599.61 of the Business and Professions Code, as added by Section 31 of Chapter 291 of the Statutes of 2012, is amended to read:7599.61.(a)The director may suspend or revoke an alarm company operator license, a qualified manager certificate, an alarm agent registration, or a firearms permit, issued under this chapter, if the director determines that the licensee or his or her manager, if an individual, or if the licensee is a person other than an individual, or his or her employees, that any of its officers, partners, employees, or its manager, has:
(1)Made any false statement or given any false information in connection with an application for a license or a renewal or reinstatement of a license.
(2)Violated any provisions or committed any prohibited acts of this chapter.
(3)Been convicted of any felony or misdemeanor including illegally using, carrying, or possessing a dangerous weapon.
(4)Committed or permitted any employee to commit any act, while the license was expired, which would be cause for the suspension or revocation of a license, or grounds for the denial of an application for a license.
(5)Committed assault, battery, or kidnapping, or used force or violence on any person, without proper justification.
(6)Violated, or advised, encouraged, or assisted the violation of any court order or injunction in the course of business as a licensee.
(7)Been convicted of a violation of Section 148 of the Penal Code.
(8)Committed any act which is a ground for denial of an application for license under this chapter.
(9)Committed any act prohibited by Chapter 1.5 (commencing with Section 630) of Title 15 of Part 1 of the Penal Code.
(10)Committed any act in the course of the licensees business constituting dishonesty or fraud.
(b)This section shall become operative on January 1, 2016. 2022.
SEC. 25.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
|
Date
|
Status
|
|---|---|
| May 26, 2015 | Read third time. Passed. (Ayes 38. Noes 0. Page 1098.) Ordered to the Assembly. |
| Aug 7, 2015 | Chaptered by Secretary of State. Chapter 140, Statutes of 2015. |
| Aug 7, 2015 | Approved by the Governor. |
| Jul 30, 2015 | Enrolled and presented to the Governor at 10 a.m. |
| Jul 16, 2015 | Read third time. Passed. (Ayes 79. Noes 0. Page 2431.) Ordered to the Senate. |
| Jul 16, 2015 | Read third time. Passed. Ordered to the Senate. |
| Jul 16, 2015 | In Senate. Ordered to engrossing and enrolling. |
| Jul 9, 2015 | Read second time. Ordered to consent calendar. |
| Jul 8, 2015 | From committee: Do pass. Ordered to consent calendar. (Ayes 14. Noes 0.) (July 8). |
| Jun 23, 2015 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 14. Noes 0.) (June 23). Re-referred to Com. on APPR. |
| Jun 4, 2015 | Referred to Com. on B. & P. |
| May 26, 2015 | Read third time. Passed. (Ayes 38. Noes 0.) Ordered to the Assembly. |
| Feb 9, 2015 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
| May 26, 2015 | In Assembly. Read first time. Held at Desk. |
| May 19, 2015 | Read second time. Ordered to third reading. |
| May 18, 2015 | From committee: Be ordered to second reading pursuant to Senate Rule 28.8. |
| May 8, 2015 | Set for hearing May 18. |
| May 5, 2015 | Read second time and amended. Re-referred to Com. on APPR. |
| May 4, 2015 | From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 6. Noes 0. Page 818.) (April 28). |
| Apr 21, 2015 | Set for hearing April 28. |
| Apr 14, 2015 | From committee: Do pass and re-refer to Com. on JUD. with recommendation: To consent calendar. (Ayes 9. Noes 0. Page 591.) (April 13). Re-referred to Com. on JUD. |
| Mar 18, 2015 | Set for hearing April 13. |
| Feb 19, 2015 | Referred to Coms. on B., P. & E.D. and JUD. |
| Feb 10, 2015 | From printer. May be acted upon on or after March 12. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Jul 16, 2015 | SB 177 Wieckowski Consent Calendar Second Day Regular Session | Assembly Floor |
Passed |
|
| Jul 8, 2015 | Do pass. To Consent Calendar. | Assembly Standing Committee on Appropriations |
Passed |
|
| Jun 23, 2015 | Do pass and be re-referred to the Committee on [Appropriations] with recommendation: To Consent Calendar | Assembly Standing Committee on Business and Professions |
Passed |
|
| May 26, 2015 | Senate 3rd Reading SB177 Wieckowski | Senate Floor |
Passed |
|
| Apr 28, 2015 | Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations] | Senate Standing Committee on Judiciary |
Passed |
|
| Apr 13, 2015 | Do pass, but first be re-referred to the Committee on [Judiciary] with the recommendation: To Consent Calendar | Senate Standing Committee on Business, Professions and Economic Development |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| California Alarm Association | ** Support | May 26, 2015 |
Date of Hearing: July 8, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
SB 177
(Wieckowski) – As Amended May 5, 2015
Policy Committee: |
Business and Professions |
Vote: |
14 - 0 |
|
|
|
|
|
|
|
|
Urgency: No State Mandated Local Program: Yes Reimbursable: No
SUMMARY:
This bill extends the authorization of the Bureau of Security and Investigative Services (Bureau) to issue an alarm company operator license to a limited liability company (LLC) from January 1, 2016, to January 1, 2019.
FISCAL EFFECT:
On-going annual costs to the Bureau in the range of $22,000 to $35,000 (Private Security Services Fund) to issue alarm company operator licenses to LLCs beyond the January 1, 2016, sunset date. This fund is self-supporting with fee revenue.
COMMENTS:
Purpose. According to the author, "When the state first authorized businesses to incorporate as LLCs, alarm companies were one of the businesses prohibited from forming or operating a LLC due to consumer protection concerns. The prohibition was originally targeted at keeping law firms and accounting firms from becoming LLCs. Those professions are now allowed to become Limited Liability Partnerships (LLP). Subsequently, other industries were statutorily authorized to form LLCs as well. Today, [nearly] all other states allow alarm companies to organize as LLCs. This bill extends the sunset date until 2019 to allow alarm companies to continue to organize as LLCs.”
Background. Unless expressly authorized, boards and bureaus under the Department of Consumer Affairs (DCA) are prohibited from issuing a license, certification or registration to an entity organized as an LLC. The rationale is to ensure that service providers who harm others by their misconduct, incompetence, or negligence should not be able to limit their liability by operating as an LLC.
In 2004 the Attorney General (AG) concluded that a business that provides services requiring a license, certification, or registration pursuant to the Business and Professions Code may conduct its activities as an LLC if the services rendered require only a nonprofessional, occupational license. Since this AG Opinion was released, several statutory changes have been made to incorporate LLCs into the licensure provisions of boards and bureaus regulated by the DCA.
In 2012, when alarm companies were first allowed to operate as LLCs, the bill included a three year sunset date to ensure that the required liability insurance levels were sufficient to cover the potential number of claims. Because there is still insufficient data on insurance levels, this bill also contains a three-year sunset date. Of the 2,000 licensed alarm companies, approximately 70 are LLCs.
Current Legislation.
SB 284 (Cannella), pending in this committee, extends the sunset provisions on professional engineer and land surveyor LLPs to January 1, 2019.
SB 468 (Hill), pending in the Assembly Business and Professions Committee, among other provisions, imposes training, psychological evaluation, and training duties on various security forces, and subjects the Bureau to review by the appropriate policy committees of the legislature.
Prior Legislation.
AB 1608 (Olsen), Chapter 669, Statutes of 2014, among other provisions, authorized the Bureau, until January 1, 2016, to issue a private investigator’s license to LLCs.
SB 1077(Price), Chapter 291, Statutes of 2012, among other provisions, authorized LLCs, until January 1 2016, to be issued to alarm company operator licenses if specified liability insurance requirements are met.
SB 469 (Beverly and Killea), Chapter 1200, Statutes of 1994, prohibited a foreign or domestic LLC from rendering professional services in this state unless expressly authorized under applicable provisions of law.
Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081
SB 177
Page 5
Date of Hearing: June 23, 2015
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Susan Bonilla, Chair
SB 177
(Wieckowski) – As Amended May 5, 2015
SENATE VOTE: 38-0
SUBJECT: Alarm companies: limited liability companies.
SUMMARY: Extends the authorization of the Bureau of Security and Investigative Services (BSIS) to issue an alarm company operator license to a limited liability company (LLC) until January 1, 2019.
EXISTING LAW:
Defines "professional services" as services that may only be rendered under a license, certification, or registration under the Business and Professions Code (BPC), Chiropractic Act, or Osteopathic Act. (Corporations Code (CC) §§ 13401)
Provides for the licensure, registration, and regulation of alarm company operators and alarm agents by the BSIS, within the Department of Consumer Affairs (DCA). (BPC §7590 et seq.)
Until January 1, 2016:
Authorizes the BSIS to issue an alarm company operator license to a LLC;
Defines licensee to include a LLC licensed with the BSIS; (BPC §7590(i))
Requires a LLC, as a condition for licensure, to maintain at least one policy of insurance against liability for damages arising out of the alarm company services it provides: (BPC § 7599.34(b))
For a LLC licensee with five or fewer persons named as managing persons, the total aggregate limit of liability under the required insurance required must be at least $1,000,000. (BPC § 7599.34(c)(1))
For a LLC with more than five persons named as managing members, the LLC are required to maintain an additional $100,000 (up to a net of $5,000,000) of insurance for each managing member. (BPC § 7599.34(c)(2))
When applying for a LLC license, including reinstatement or reactivation, the applicant or licensee must submit the information and documentation required by BPC § 7599.34 to show compliance with the specified financial security requirements. (BPC § 7599.34(d))
For every insurance policy secured under BPC § 7599.34, the licensee must submit a Certificate of Liability Insurance to the BSIS. The insurer of the policies must report the following to the BSIS: name, license number, policy number, coverage dates, the date and amount of any payment of claims, and any applicable cancellation date. (BPC § 7599.34(e))
The license of a licensee that fails to maintain the required insurance is subject to suspension. (BPC § 7599.34(f))
Where a LLC license is suspended for failure to maintain sufficient insurance pursuant to the above provisions, the members of the LLC are personally liable, up to $1,000,000 each, for damages to third parties in connection with the LLC’s performance of acts or contracts requiring a license while suspended. (BPC § 7599.34(g))
Extends various identification and reporting requirements to managing members of LLCs. (BPC §§ 7593.1, 7593.7(a), 7599.32(b), BPC § 7599.42(a), BPC § 7599.43(a), 7599.48(a))
THIS BILL:
Extends the sunset date for the authorization of the BSIS to issue an alarm company operator license to a LLC from January 1, 2016 to January 1, 2019.
FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, this bill will result in negligible state costs.
COMMENTS:
Purpose. This bill is sponsored by the California Alarm Association. According to the author, “[BPC] § 7590.1 currently allows alarm companies to form [LLCs] for the purposes of operating their businesses. Under an agreement to ensure legislative oversight of the LLC corporate form, the enabling statute for this industry is set to expire in 2016.
Under [the BPC] there are several professional businesses that are prohibited from becoming LLCs. When the state first authorized businesses to incorporate as LLCs, alarm companies were one of the businesses that were originally prohibited from forming or operating a LLC.
The prohibition stems from broad language in the [BPC] that was originally targeted at keeping law firms and accounting firms from becoming LLCs. Those professions are now allowed to become Limited Liability Partnerships (LLP). Subsequently, other industries were statutorily authorized to form LLCs as well. Today, [nearly] all other states allow alarm companies to organize as LLCs. [This bill] simply extends the sunset date until 2019 to allow alarm companies to organize as an LLC.”
Background. Alarm companies and their employees are licensed and regulated by the BSIS. In order for alarm companies to do business, they must meet the following BSIS requirements:
Operator License. Alarm companies must have an alarm company operator license. The BSIS defines an alarm company operator as a business that sells, installs, maintains, monitors, services, or responds to alarm systems. Alarm company LLCs must also have proof of liability insurance on file with the BSIS as a condition for licensure. There are currently about 2,000 licensed alarm company operators.
Manager Certificate. Alarm company qualified managers must have a qualified manager certificate. The BSIS requires each company to have a person designated as the qualified manager to manage the day-to-day activities of the business. A company owner may serve as the qualified manager or designate another person to serve in this capacity. As a condition for licensure, the person serving as the alarm company operator’s qualified manager must pass a licensing exam. There are currently about 2,000 qualified managers.
Registration. Alarm agents must hold an alarm employee registration. An alarm agent is an employee of the alarm company. There are currently about 19,000 registered alarm company employees.
Alarm company operators, qualified managers, and agents are permitted to obtain a BSIS-issued firearm permit under specified conditions. Regular retail stores do not have to be licensed if they sell alarm systems only at the store, do not install the equipment, and do not perform any other alarm company operator functions.
LLCs and Insurance Requirements. According to the U.S. Small Business Administration (SBA), an LLC is a hybrid type of legal structure that has two benefits over other types of business organizations. First, it provides its members the limited liability of a corporation. Second, it provides the tax benefits and operational flexibility of a partnership. Therefore, a LLC is often a desirable structure to use for business.
However, state law prohibits a LLC from providing professional services unless expressly authorized under the law. “Professional services” are services that require a license, certification, or registration to lawfully perform, such as contracting, medicine, or security services. The reason professional services are usually excluded from forming LLCs is for consumer protection—to prevent the members of a LLC who harm others through misconduct, incompetence, or negligence from limiting their liability.
For instance, there may be situations where a LLC harms a consumer but does not have enough company funds to reimburse the consumer for the injury caused. If that occurs, the consumer may be left without a remedy because the individual members are protected from liability. To remedy this issue, state law requires LLCs that carry a minimum level of liability insurance.
In 2012, when alarm companies were first provided the opportunity to operate as LLCs, the bill included a three-year sunset date to ensure there were no unintended consequences and that the liability insurance levels were sufficient to cover the potential number of claims. Because there is still insufficient data on insurance levels, this bill also contains a three-year sunset date.
BSIS Sunset Issues and Limited Liability. In March of 2015, the Assembly Business and Professions Committee and the Senate Business, Professions and Economic Development Committee (Committees) conducted joint oversight hearings to review 12 regulatory entities, including the BSIS.
While not specific to alarm companies, there were several issues raised by the Committees surrounding the regulation of the armed security industry, including the lack of proper training, screening, and reporting of the use of firearms. While the BSIS is not currently able to track the LLCs that carry firearm permits, it was able to provide the following:
Of the 2000 licensed alarm companies, approximately 70 are LLCs.
From January 1, 2013 to present, the DCA’s Complaint Resolution Program received 544 complaints relating to alarm companies. 153 of the complaints involved an alarm company organized as an LLC. It is important to note that a single company can receive more than one complaint, and the BSIS found that the larger alarm companies received multiple complaints.
From July 1, 2012 to present, the BSIS investigated 247 cases related to alarm companies. Five of the alarm companies found to have committed violations are organized as LLCs.
Based on the BSIS’ available data, it is unclear what effects limited liability may have on alarm companies with armed personnel.
For instance, it may be worth exploring whether an alarm company LLC with armed personnel should be required to carry higher levels of insurance than a LLC with unarmed personnel. Therefore, the three-year sunset date will also provide an opportunity to examine the issue after more information can be collected.
Other States. 49 other states allow alarm companies to operate as an LLC.
Current Related Legislation. SB 284 (Cannella), of this legislative session, extends the sunset provisions on professional engineer and land surveyor LLPs to January 1, 2019. STATUS: This bill is currently pending in the Assembly Business and Professions Committee.
SB 468 (Hill), of this legislative session, is one of several sunset bills resulting from the March 2015 sunset hearings. Among other things, SB 468 imposes training, psychological evaluation, and training duties on various security forces and subjects the BSIS to review by the appropriate policy committees of the legislature. STATUS: This bill passed the Senate and is currently pending referral to the appropriate Assembly policy committee.
Prior Related Legislation. AB 1608 (Olsen), Chapter 669, Statutes of 2014, among other things, authorized the BSIS, until January 1, 2016, to issue a private investigator’s license to LLCs.
SB 1077(Price), Chapter 291, Statutes of 2012, among other things, authorized LLCs, until January 1 2016, to be issued to alarm company operator licenses if specified liability insurance requirements are met.
SB 469 (Beverly and Killea), Chapter 1200, Statutes of 1994, prohibited a foreign or domestic LLC from rendering professional services in this state unless expressly authorized under applicable provisions of law.
REGISTERED SUPPORT:
California Alarm Association (sponsor)
REGISTERED OPPOSITION:
None on file.
Analysis Prepared by: Vincent Chee / B. & P. / (916) 319-3301
SB 177
Page 5
|
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
THIRD READING
Bill No: SB 177
Amended: 5/5/15
SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 9-0, 4/13/15
AYES: Hill, Bates, Berryhill, Block, Galgiani, Hernandez, Jackson, Mendoza, Wieckowski
SENATE JUDICIARY COMMITTEE: 6-0, 4/28/15
AYES: Jackson, Anderson, Hertzberg, Leno, Monning, Wieckowski
NO VOTE RECORDED: Moorlach
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SUBJECT: Alarm companies: limited liability companies
DIGEST: This bill extends the sunset date for the Bureau of Security and Investigative Services to issue an alarm company operator license to a limited liability company from January 1, 2016, to January 1, 2022.
Existing law:
Provides for the licensure and regulation of alarm companies and alarm company managers and employees by the Bureau of Security and Investigative Services (Bureau) within the Department of Consumer Affairs (DCA) under the Alarm Company Act. (Business and Professions Code (BPC) §7590).
Defines a “licensee” as a business entity, which includes an individual, partnership, limited liability company (LLC), or corporation. (BPC §7590.1)
Defines an “alarm company operator” as a person who, for any consideration, engages in business or accepts employment to install, maintain, alter, sell on premises, monitor, or service alarm systems or who responds to alarm systems except for any alarm agent. (BPC §7590.2)
Prohibits an alarm company operator from transferring his or her license to another person, as specified. (BPC §7599.47)
Authorizes the Bureau to issue a citation and fine to a licensed alarm company operator, qualified manager, or an alarm agent for specified violations of the Alarm Company Act, and requires the citation to be in writing, contain a written description of the violation, and the provision of law violated. The citation shall contain an order of abatement and shall not exceed $2,500.
(BPC §7591.9)
Prohibits, under the Beverly-Killea Limited Liability Company Act, domestic and foreign LLCs from rendering professional services in California. (Corporations Code (CC) § 17375).
Defines “professional services” as “any type of professional services which may be lawfully rendered only pursuant to a license, certification, or registration authorized by the BPC, the Chiropractic Act, or the Osteopathic Act.” (CC § 13401(a)).
Explicitly provides that an LLC may render services that may be lawfully rendered only pursuant to a license, certificate, or registration authorized by the BPC if the applicable provisions of the BPC authorize an LLC to hold that license, certificate, or registration. (CC§ 17002 (c))
Authorizes the Bureau to issue an alarm company operator license to authorize an LLC along with other provisions for alarm companies to operate as an LLC until January 1, 2016. (BPC §7590.1)
This bill:
Extends the sunset date for the Bureau to issue an alarm company operator license to an LLC from January 1, 2016, to January 1, 2022.
Background
Formation
and operation of LLCs in California was authorized in 1994 through
the Beverly-Killea Limited Liability Company Act (SB 469, Chapter
1200, Statutes of 1994). An uncodified provision in the Act
specified that nothing in the Act shall be construed to permit a
domestic or foreign LLC to render professional services, as defined
in the CC, unless expressly authorized under applicable provisions of
the BPC or the Chiropractic Act. This provision was codified in 1999
(SB 284, Kelley, Chapter 1000, Statutes of 1999).
Under
the Moscone-Knox Professional Corporation Act (CC § 13400 ff.),
"professional services" is defined as any type of
professional services that may be lawfully rendered only pursuant to
a license, certification, or registration authorized by the BPC, the
Chiropractic Act, or the Osteopathic Act.
The rationale
for requiring that an LLC be expressly authorized was apparently to
ensure that service providers who harm others by their misconduct,
incompetence, or negligence should not be able to limit their
liability by operating as an LLC and thus become potentially
judgment-proof.
Based upon these provisions of law, it has
been commonly understood that the boards and bureaus under the DCA
are prohibited from issuing a license, certification or registration
to an entity organized as an LLC.
However, in 2004, an Attorney General (AG) Opinion No. 04-103 concluded that a business that provides services requiring a license, certification, or registration pursuant to the BPC may conduct its activities as an LLC if the services rendered require only a nonprofessional, occupational license.
In
discussing the distinctions between professional services and
nonprofessional occupational services, the AG Opinion further
discusses Mann v. Department of Motor Vehicles (1999) 76
Cal.App.4th 312 (Mann), in which the court concluded that the
services performed pursuant to a vehicle salesperson license issued
under the Vehicle Code were not “professional services,” but
rather were “nonprofessional, occupational” services.
Since this AG Opinion has been released, several changes to the BPC have been made through the Legislature to incorporate LLCs into the licensure provisions of several different boards and bureaus regulated by the DCA.
SB
392 (Florez, Chapter, 698, Statutes of 2010) was one such amendment.
SB 392 authorized the Contractors State License Board to issue
a contractor license to an LLC, and incorporated the LLC business
structure into the contractor license provisions. The bill
additionally added paragraph (c) to CC Section 17002 to read: “(c)
Notwithstanding Section 17375, a limited liability company may render
services that may be lawfully rendered only pursuant to a license,
certificate, or registration authorized by the Business and
Professions Code if the applicable provisions of the Business and
Professions Code authorize a limited liability company to hold that
license, certificate, or registration.”
Following closely behind SB 392, SB 1077 (Price, Chapter 291, Statutes of 2012) specifically authorized an LLC to hold an alarm company operator license. The provision was set to be repealed on January 1, 2016, so that the Legislature could evaluate the adequateness of the LLC insurance requirements and enforcement by the Bureau.
This bill extends the provision that authorizes an LLC to hold an alarm company operator license from its sunset date of January 1, 2016, to January 1, 2022.
Related/Prior Legislation
SB 1077 (Price, Chapter 291, Statutes of 2012) authorized the Bureau to issue an alarm company operator license to an LLC. A failure of a limited liability alarm company to comply with the requirements to submit the company’s information and documentation with the Bureau would subject the company’s license to suspension and mandated that any violation of the Alarm Company Act by an LLC be considered a crime.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes
California Alarm Association
OPPOSITION: (Verified 5/20/15)
None received
ARGUMENTS IN SUPPORT: Writing in support of this bill, the California Alarm Association (CAA) states that the provisions chaptered by SB 1077 in 2012 have been able to grant greater protection for consumers by:
Allowing an alarm company to professionally organize as an LLC only if the company maintains additional insurance requirements to ensure proper consumer protections.
Granting the Bureau greater and direct authority to cite and fine alarm companies operating without a license.
Allowing an alarm company to keep the same alarm license if it changes its business structure (i.e. from a corporation to a LLC) so that the Bureau would not have to process a new application for an alarm company license by the same entity.
Granting alarm companies probationary licenses
CAA seeks to extend the sunset date from January 1, 2016, to January 1, 2022, on all four of the above listed provisions that SB 1077 put into law in order to properly protect consumers.
Prepared by: Janelle Miyashiro / B., P. & E.D. / (916) 651-4104
5/20/15 16:16:15
SB 177 (Wieckowski)
Page 11 of 11
Senator Hannah-Beth Jackson, Chair
2015 - 2016 Regular Session
SB 177 (Wieckowski)
Version: February 9, 2015
Hearing Date: April 28, 2015
Fiscal: Yes
Urgency: No
RD
SUBJECT
Alarm companies: limited liability companies
DESCRIPTION
Existing law, until January 1, 2016, authorizes a limited liability company (LLC) to be issued an alarm company operator’s license, if, among other things, certain insurance requirements are met. This bill would extend the sunset date on the authorization to January 1, 2022.
BACKGROUND
Under the Beverly-Killea Limited Liability Company Act (the LLC Act) (SB 469 (Beverly and Killea, Ch. 1200, Stats.1994)), a foreign or domestic limited liability company (LLC) is prohibited from rendering professional services in this state unless expressly authorized under applicable provisions of law. “Professional services” are services for which a license, certification, or registration is required under specified statutes.
The rationale for the exclusion was that service providers who harm others by their misconduct, incompetence or negligence should not be able to limit their liability by operating as a LLC or LLP and, thus, become potentially judgment-proof.
Generally, a limited liability company is a legal entity that allows one or more owners to conduct a business without any owner having personal liability for the obligations of the business. The salient nontax characteristics of an LLC are limited liability for its owners (as in a corporation) and freedom to structure management rights and financial interests in the entity in virtually any configuration the parties wish (as in a partnership). An LLC most often elects to be treated as a partnership for income tax purposes, so that the income, gains, losses, deductions, and credits of the LLC generally will flow through to its members for reporting on their personal tax returns, the distribution depending on the terms of the LLC agreement, not necessarily the ownership interest of the individual members.
Until the creation of LLCs, the limited partnership and the subchapter S corporation were the primary forms of business entity used to achieve the tax status and limited liability features now offered by the LLC. Each of those forms has its drawbacks, but the LLC can provide the advantages of both without the disadvantages of either.
A limited partnership allows pass-through tax treatment, flexibility in financial structuring, and limited liability for the “limited” partners (as long as they do not take part in the control of the business), but requires at least one person (the “general” partner) be fully liable for the obligations of the business. In contrast, no member of an LLC is required to be personally liable for the company’s obligations, and yet, each member is permitted to manage the company and to take part in the control of the business without losing the member’s limited liability. (Corp. Code Sec. 17703.04.)
Although an S corporation allows pass-through tax treatment and limited liability for its owners, S corporation status limits the parties’ flexibility in structuring their financial arrangements. Furthermore, only limited persons and entities can be S corporation shareholders, and an S corporation will lose its pass-through tax treatment if an ineligible entity becomes a shareholder. An LLC, on the other hand, can have different classes of ownership, and income, gain, loss, and other items may be allocated disproportionately to ownership without affecting the LLC’s pass-through tax treatment. Any person can be a member of an LLC (thus sidestepping the restrictions on shareholders in the case of an S corporation).
Under the Beverly-Killea LLC Act, an LLC cannot provide professional services unless permitted by the Business and Professions Code. Since the Act was enacted, contractors, private cemeteries, repossessors, alarm companies, and, most recently, private investigators have been authorized to operate as LLCs. In 2008, SB 1225 (Harman, Ch. 114, Stats. 2008) authorized private cemetery LLCs, however, it also prohibited licensees of professional services rendered in connection with the operations of a cemetery authority from having any ownership interest in the LLC. In 2009, SB 392 (Florez, Ch. 698, Stats. 2009) authorized LLCs to be issued contractors’ licenses and imposed minimum levels of liability coverage. These requirements for a minimum amount of liability coverage were based on bills that authorized attorneys, accountants, architects, engineers, and land surveyors to operate as the only limited liability partnerships (LLPs) in California.
In 2012, SB 1077 (Price, Ch. 291, Stats. 2012), among other things, allowed for an LLC to be issued an alarm company operator’s license, as is permitted in 49 other states. This Committee conditioned its approval of SB 1077 on similar liability coverage that was included in other LLC and LLP bills, and added a three year sunset to its provisions. Together, the insurance requirements and the sunsets are intended to provide this Committee with the opportunity to evaluate whether liability for judgments against the conditionally-authorized LLCs have been sufficiently covered by insurance and whether the mandated insurance levels are sufficient to meet potential future claims. This bill now would extend the sunset on the alarm company LLC provisions to January 1, 2016.
This bill was heard in the Senate Business, Professions & Economic Development Committee on April 13, 2015, and was passed out on a vote of 9-0.
CHANGES TO EXISTING LAW
Existing law, the Beverly-Killea LLC Act, generally prohibits domestic and foreign limited liability companies from rendering professional services, as defined, in California. Existing law provides that an LLC may render services that may be lawfully rendered only pursuant to a license, certificate, or registration authorized by the Business and Professions Code if the applicable provisions of the Business and Professions Code authorize a limited liability company to hold that license, certificate, or registration. (Corp. Code Sec. 17701.04.)
Existing law defines professional service as those services that may only be lawfully rendered pursuant to a license, certification, or registration under the Business and Professions Code, Chiropractic Act, Osteopathic Act, or Yacht and Ship Brokers Act. (Corp. Code Secs. 13401, 13401.3.)
Existing law provides that the debts, obligations, or other liabilities of a limited liability company, whether arising in contract, tort, or otherwise, are solely the debts, obligations, or other liabilities of the limited liability companies to which the debts, obligations, or other liabilities relate. They do not become the debts, obligations, or other liabilities of a member or manager solely by reason of the member acting as a member or manager for the limited liability company. (Corp. Code Sec. 17703.04(a).) Existing law provides for the liability of a member of an LLC under the common law theory of alter ego liability, and under any judgment of a court for any debt, obligation, or liability (whether arising from contract, tort, or otherwise) of the LLC, to the same extent as a shareholder may be personally liable for any debt, obligation, or liability of the corporation, except as specified. (Corp. Code Sec. 17703.04(b).) Existing law provides that a member may otherwise agree to be personally obligated for any or all debts, obligations, and liabilities of the LLC in writing in the articles of incorporation or written operating agreement, as specified. (Corp. Code Sec. 17703.04(e).)
Existing law establishes the Alarm Company Act, which provides for the licensure, registration, and regulation of alarm company operators and alarm agents by the Bureau for Security and Investigative Services (BSIS). (Bus. & Prof. Code Sec. 7590 et seq.)
Existing law defines a licensee to include a business entity, whether an individual, partnership, limited liability company, or corporation licensed under the Alarm Company Act. (Bus. & Prof. Code Sec. 7590(i).)
Existing law, in relevant part, permits the director of Consumer Affairs to deny a license, certificate, or registration regulated by the Alarm Company Act on specified grounds, including, among other things, that the applicant has been managing member of an LLC that has been refused a license under this chapter or whose license has been suspended or revoked. (Bus. & Prof. Code Sec. 7590.10(a)(7).)
Existing law, in relevant part, authorizes the director of Consumer Affairs to suspend or revoke an alarm company operator license, if the director determines that any of the LLC’s managing partners has engaged in certain acts, including acts in violation of the Alarm Company Act, among others. (Bus. & Prof. Code Sec. 7599.61(a).) Existing law, in relevant part, provides that the director of Consumer Affairs may deny a license, certificate, or registration regulated by the Alarm Company Act on the grounds that the applicant was a managing member who has been refused a license under the Act or whose license has been suspended or revoked. (Bus. & Prof. Code Sec. 7591.10(a)(7).) Existing law, in relevant part, also authorizes the director of Consumer Affairs to refuse a license to an applicant pending final disposition of an investigation of criminal activity or of a disciplinary action previously filed against the person or applicant or against a managing member of the applicant. (Bus. & Prof. Code Sec. 7593.6(a).)
Existing law, in relevant part, prohibits, except as specified, an individual from being in active charge of the business if the individual has ever had a license revoked for cause or been disqualified from further employment in the alarm company operator business pursuant to the Alarm Company Act, or was a managing partner of a business whose license has been revoked. (Bus. & Prof. Code Sec. 7594.4(a).)
Existing law, in relevant part, prohibits a licensee from conducting a business as an LLC unless the licensee holds a valid license issued to that exact same LLC, subject to a $100 fine for each violation. Existing law provides, specific to alarm company LLCs, that as a condition of the issuance, reinstatement, reactivation, or continued valid use of a license under the Alarm Company Act, an LLC must maintain a policy or policies of insurance against liability imposed on or against it by law for damages arising out of claims based upon acts, errors, or omissions arising out of the alarm company services it provides, as follows, subject to suspension:
For an LLC licensee with five or fewer persons named as managing persons pursuant to specified provisions, the total aggregate limit of liability under the policy or policies required under the Act shall not be less than $1,000,000.
For an LLC with more than five persons named as managing members pursuant to specified provisions, an additional $100,000 of insurance shall be obtained for each person named as managing members of the licensee except that the maximum amount of insurance is not required to exceed $5,000,000 in any one designated period, less amounts paid in defending, settling, or discharging claims. (Bus. & Prof. Code Sec. 7599.34(b), (c), (f).)
Existing law provides that, prior to the issuance, reinstatement, or reactivation of an LLC license under the Alarm Company Act, the applicant or licensee must submit the information and documentation required by this section relating to insurance coverage requirements, demonstrating compliance with the specified financial security requirements. (Bus & Prof. Code Sec. 7599.34(d).)
Existing law requires that, for any insurance policy secured by a licensee in satisfaction of this section, a Certificate of Liability Insurance be submitted to the BSIS, as specified. The insurer must report to the BSIS the following about any policy required: name, license number, policy number, coverage dates, the date and amount of any payment of claims, and cancellation date, if applicable. (Bus. & Prof. Code Sec. 7599.34(e).)
Existing law provides that where an LLC’s license is suspended for failure to maintain sufficient insurance pursuant to the above provisions, each member of the LLC shall be personally liable up to $1,000,000 each for damages resulting to third parties in connection with the company’s performance, during the period of suspension, of any act or contract where a license is required by the Alarm Company Act. (Bus. & Prof. Code Sec. 7599.34(g).)
Existing law, in relevant part, requires that within seven days after receiving a final civil court judgment filed against the licensee of any managing member or employee of a licensee for an amount of more than $500 pertaining to any act done within the course and scope of his or her employment that may be in violation of the Alarm Company act, the licensee or his or her manager must deliver to the BSIS chief a copy of the judgment, subject to fines. Existing law requires similar requirements for violent incidents involving a dangerous weapon, as specified. (Bus. & Prof. Code Sec. 7599.42(a).)
Existing law extends other provisions of the Alarm Company Act to managing members of LLCs. (Bus. & Prof. Code Secs. 7593.1, 7599.32(b), 7593.7(a), 7599.48(a).)
Existing law sunsets the above authorizations for alarm companies to operate as an LLC on January 1, 2016.
This bill would extend the authorization for an LLC to be issued an alarm company operator license, and the related provisions, above, until January 1, 2022.
COMMENT
1. Stated need for the bill
According to the author:
Business and Professions Code [Sec.] 7590.1 currently allows alarm companies to form Limited Liability Companies (LLC) for the purposes of operating their businesses. Under an agreement to ensure legislative oversight of the LLC corporate form, the enabling statute for this industry is set to expire in 2016. Under [the] Business [and] Professions Code there are several professional businesses that are prohibited from becoming LLCs. When the state first authorized businesses to incorporate as LLCs, alarm companies were one of the businesses that were originally prohibited from forming or operating a[n] LLC. The prohibition stems from broad language in the B&P code that was originally targeted at keeping law firms and accounting firms from becoming LLCs. Those professions are now allowed to become Limited Liability Partnerships (LLP). Subsequently, other industries were statutorily authorized to form LLCs as well. Today, near all other states allow alarm companies to organize as LLCs.
SB 177 extends the sunset for alarm companies to form LLCs from 2016 to 2022.
The California Alarm Association, the sponsor of this bill, adds that “SB 1077 also granted the Bureau of Security and Investigative Services (BSIS) greater authority to cite and fine alarm companies operating without a license. It is illegal to operate an alarm company without a license issued by the BSIS. Part of the licensing process is a thorough background check on the owners and employees of the alarm company. However, under previous law the BSIS lacked the direct authority to regulate unlicensed alarm companies. When discovering an alarm company was operating illegally without a proper license, the BSIS had to rely on the local District Attorney to enforce the Alarm Company Act. Securing the support of the local DA was difficult, as they often have more pressing issues to deal with. Granting the BSIS direct authority to deal with unlicensed alarm companies as provided under SB 1077, provides greater protection for consumers. SB 177 [also] seeks to extend the sunset on this provision.”
2. Significance of insurance liability coverage requirements of LLC and LLP bills
California’s LLP law has always sought to strike a balance between allowing professional licensed service providers to operate in a mode offering both tax and liability-limiting advantages while preserving to an appropriate degree the ability of a party injured by professional negligence to recover damages for that injury. Thus, an insurance requirement has always been imposed upon professional licensees wishing to operate as an LLP. Similarly, over the years, insofar as the Legislature has authorized LLCs to hold various professional licenses, insurance requirements have been imposed upon professional licensees wishing to operate as an LLC. (See Background.)
The rationale behind the insurance requirement is to ensure that a person who is injured by an LLP or LLC is likely able to collect his or her judgment. Because of the limited liability attributes of these business entities, the injured person can no longer rely on the joint and several liability of the partners and their personal assets, but must look to the assets of the LLP or LLC. To ensure adequate but not necessarily complete recovery in all claims, the insurance requirement is added as a condition of being permitted to operate as a LLP or LLC. Thus, even if the LLP or LLC has few assets because the profits are regularly distributed to its members, the required insurance is available to pay tort damages.
The difficulty has always been in the setting of the minimum level of required insurance in an appropriate amount. While the law has never sought to cover all potential claims, since that would obviate the need and benefit for operating as a LLP or LLC, the law has always sought to ensure that most predictable claims are covered. Hence, the Committee has always sought and used the available insurance claims data in determining the appropriate level of minimum insurance.
According to the author and sponsor, they are unaware of any problems resulting from the current authorization for alarm companies to form Limited Liability Companies. At the same time, this Committee has not been provided any information or insurance data that would indicate whether any judgments against alarm companies operating as LLCs have been sufficiently covered by insurance and whether the mandated insurance levels are sufficient to meet potential future claims. As noted above and in this Committee’s analysis of prior sunset reviews of legislation for similar entities, evaluating the sufficiency of insurance levels is critical to ensuring the ability of a party injured by professional negligence to recover damages for that injury.
3. Incomplete data is not a new problem
In 1998, in evaluating the authorization for architecture LLPs, this Committee’s analysis stated:
The scanty available claims data provided by the sponsor does not provide a clear picture of the types of judgments assessed against architects for professional negligence.
(See AB 469 (Cardoza, Ch. 504, Stats. 1998), extending the sunset for architecture LLPs.)
Again in 2001, that precise information is not available. (AB 1596 (Shelley, Ch. 595, Stats. 2001).) And in 2006, only partial information was made available when the architecture LLP authorization once again came up for review. (AB 2914 (Leno, Ch. 426, Stats. 2006).) As noted then, at the very least, the lack of complete data justifies the policy of extending the sunset for the LLP law for moderate periods of time, to enable periodic review, rather than its complete repeal. This bill would appear to be consistent with that policy, by extending, as opposed to repealing, the sunset date.
Arguably, however, given the lack of data available at this time (see Comment 2 above), the Committee may wish to consider a shorter, three-year sunset period, to allow the sponsor and BSIS to collect more information that could assist in the evaluation of the mandated insurance levels.
Suggested Amendment:
Replace the January 1, 2022 sunset in the bill with January 1, 2019 sunset
4. Potential future issue
The current insurance coverage required in the alarm company LLC laws provide that for an LLC with more than five persons named as managing members pursuant to specified provisions, an additional $100,000 of insurance shall be obtained for each person named as managing members of the licensee except that the maximum amount of insurance is not required to exceed $5,000,000 “in any one designated period, less amounts paid in defending, settling, or discharging claims as set forth under this section.” (Bus. & Prof. Code Sec. 7599.34(c)(2).)
In short, the required insurance is a “wasting assets” policy that could well be depleted by defense costs and multiple claims in a coverage year so that the more difficult claims to resolve, usually the larger claims, could result in no payment at all to the tort victim because the required insurance assets for the covered year has been exhausted.
While at this time there is no information suggesting the possibility of the required insurance being exhausted in a coverage year (which would require an increase in the mandated insurance liability coverage), the issue of the “wasting asset” insurance policy and whether there should be an obligation on alarm company LLCs to replenish the policy during the course of the year deserves re-visiting in the future as defense and claims costs increase year after year.
Support: None Known
Opposition: None Known
HISTORY
Source: California Alarm Association
Related Pending Legislation: SB 284 (Cannella, 2015) would repeal the sunset provisions on professional engineer and land surveyor LLPs, thereby extending the operation of those provisions indefinitely. That bill is also scheduled to be heard in this Committee on April 28, 2015.
Prior Legislation:
AB 1608 (Olsen, Ch. 669, Stats. 2014), among other things, authorized the Bureau of Security and Investigative Services within the Department of Consumer Affairs to issue a private investigator’s license to LLCs if, among other things, certain insurance requirements are met. The bill included a January 1, 2020, sunset date.
SB 1077 (Price, Ch. 291, Stats. 2012), among other things, authorized LLCs to be issued alarm company operator licenses if certain liability insurance requirements are met. The bill included a January 1, 2016, sunset date.
SB 560 (Gorell, Ch. 291, Stats. 2011) extended the sunset for architecture LLPs to January 1, 2019, under the continuation of the insurance levels required in AB 1596 (Shelley, Ch. 595, Stats. 2001). The bill, as introduced, proposed to remove the sunset entirely.
SB 1008 (Padilla, Ch. 634, Stats. 2010) authorized licensed engineers and land surveyors to organize and operate as LLPs, as specified, and requires engineers and land surveyors organizing as LLPs to carry insurance liability coverage, as specified. This authorization is set to sunset on January 1, 2016.
SB 392 (Florez, Ch. 698, Stats. 2009) authorized the State Contractors’ License Board to issue to an LLC a license to provide contactor services, if the LLC met the liability coverage requirements provided in the bill (and met other licensing requirements).
SB 1337 (Correa, 2008) was similar to SB 392, but lacked the insurance and/or escrow deposit requirements for the LLC and its members. The bill died in this Committee.
SB 1225 (Harmon, Ch. 114, Stats. 2008) permitted an LLC to obtain a license as a cemetery authority provided it conformed to the insurance requirements for professional LLPs and provided no licensee practicing his or her profession becomes an owner-member of the LLC.
SB 414 (Corbett, Ch. 80, Stats. 2007) increased the liability coverage amounts for accountancy and law LLPs.
AB 2914 (Leno, Ch. 426, Stats. 2006) extended the sunset date of architecture LLPs until January 1, 2012, and increased the amount of insurance that such LLPs must hold.
AB 180 (Jerome Horton, 2005) was substantially similar to SB 1008 (Padilla, Ch. 634, Stats. 2010) in its provisions of the organization of engineers and land surveyors as LLPs, and contained a sunset date. That bill passed this Committee but was ultimately gutted and amended to deal with a different topic.
AB 1265 (Benoit, 2003) would have permitted professional engineers and land surveyors to organize as an LLP and would have required that, depending on the number of partners, the LLP have between $500,000 and $5 million in insurance. This bill was held in this Committee.
AB 1596 (Shelley, Ch. 595, Stats. 2001) extended the sunset date of statutes permitting architects to organize as LLPs, to January 1, 2007.
AB 469 (Cardoza, Ch. 504, Stats. 1998) authorized architects to form a LLP provided the partnership had between $500,000 and $5 million in insurance depending on the number of partners in the LLP. Only partnerships with a net worth of $10 million or more were allowed to become LLPs. This bill included a January 1, 2002, sunset date.
AB 2401 (Miller, 1996) would have allowed contractors to operate as LLCs. The bill died in this Committee.
SB 141 (Beverly, Ch. 57, Stats. of 1995) would have added numerous categories of state regulated professional service providers to the types of businesses that could operate as LLCs. However, opponents of SB 141 and that bill’s sponsor were unable to agree as to whether or not professional or licensed LLC service providers should carry adequate insurance to ensure their financial ability to respond to legal judgments for contract or tort claims. Consequently, those additional classes of businesses were amended out of SB 141 prior to its enactment.
SB 513 (Calderon, Ch. 679, Stats. 1995) authorized the establishment of LLPs for licensed attorneys and licensed accountants, as long as the LLP purchased a liability insurance policy or maintained bank deposits of least $100,000 per limited liability partner (or an aggregate of not less than $500,000 for fewer than five partners and not more than $5 million for all others). Only partnerships with a net worth of $10 million or more were allowed to become LLPs.
SB 469 (Beverly and Killea, Ch. 1200, Stats. 1994) See Background.
Prior Vote: Senate Business, Professions and Economic Development Committee: (Ayes 9, Noes 0)
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SB 177 (Wieckowski) Page 4 of 4
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: SB 177 Hearing Date: April 13, 2015
Author: |
Wieckowski |
||
Version: |
February 9, 2015 |
||
Urgency: |
No |
Fiscal: |
Yes |
Consultant: |
Janelle Miyashiro |
||
Subject: Alarm companies: limited liability companies.
SUMMARY:
Extends the sunset date for the Bureau of Security and Investigative Services to issue an alarm company operator license to a limited liability company from January 1, 2016 to January 1, 2022.
Existing law:
Provides for the licensure and regulation of alarm companies and alarm company managers and employees by the Bureau of Security and Investigative Services (Bureau) within the Department of Consumer Affairs (DCA) under the Alarm Company Act. (Business and Professions Code (BPC) §7590).
Defines a “licensee” as a business entity; which includes an individual, partnership, limited liability company, or corporation. (BPC §7590.1)
Defines an “alarm company operator” as a person who, for any consideration, engages in business or accepts employment to install, maintain, alter, sell on premises, monitor, or service alarm systems or who responds to alarm systems except for any alarm agent. (BPC §7590.2)
Prohibits an alarm company operator from transferring his or her license to another person, as specified. (BPC §7599.47)
Authorizes the Bureau to issue a citation and fine to a licensed alarm company operator, qualified manager, or an alarm agent for specified violations of the Alarm Company Act, and requires the citation to be in writing, containing a written description of the violation, and the provision of law violated. The citation shall contain an order of abatement and shall not exceed $2,500. (BPC §7591.9)
The Beverly-Killea Limited Liability Company (LLC) Act prohibits domestic and foreign limited liability companies from rendering professional services in California. (Corporations Code (CC) § 17375).
Defines “professional services” as “any type of professional services which may be lawfully rendered only pursuant to a license, certification, or registration authorized by the Business and Professions Code, the Chiropractic Act, or the Osteopathic Act.” (CC § 13401(a)).
Explicitly provides that an LLC may render services that may be lawfully rendered only pursuant to a license, certificate, or registration authorized by the BPC if the applicable provisions of the BPC authorize a limited liability company to hold that license, certificate, or registration. (CC§ 17002 (c))
Authorizes the Bureau to issue an alarm company operator license to a limited liability company along with other provisions for alarm companies to operate as an LLC until January 1, 2016. (BPC §7590.1)
This bill: Extends the sunset date for the Bureau to issue an alarm company operator license to a limited liability company (LLC) from January 1, 2016 to January 1, 2022.
FISCAL EFFECT:
Unknown. This bill has been keyed “fiscal” by Legislative Counsel.
COMMENTS:
Purpose. This bill is sponsored by the California Alarm Company Association (CAA). According to the Author, “SB 1077 has allowed alarm companies to professionally organize as Limited Liability Companies (LLCs), provided these alarm companies maintain additional insurance requirements to ensure proper consumer protections.” CAA claims that since SB 1077 became law on January 13, 2013, they are “not aware of any major lawsuits against an alarm company organized as an LLC in California that calls into question the insurance requirements imposed by SB 1077”. CAA therefore has asked to have an extension of the current law in the provisions related to limited liability alarm companies and their licensees until January 1, 2022.
Background. Formation and operation of limited liability companies (LLC) in California was authorized in 1994 through the Beverly-Killea Limited Liability Company Act (SB 469, Chapter 1200, Statutes of 1994). An uncodified provision in the Act specified that nothing in the Act shall be construed to permit a domestic or foreign limited liability company to render professional services, as defined in the Corporations Code, unless expressly authorized under applicable provisions of the Business and Professions Code or the Chiropractic Act. This provision was codified in 1999 (SB 284, Kelley, Chapter 1000, Statutes of 1999).
Under the Moscone-Knox Professional Corporation Act (Corporations Code § 13400 ff.), "professional services" is defined as any type of professional services that may be lawfully rendered only pursuant to a license, certification, or registration authorized by the Business and Professions Code, the Chiropractic Act, or the Osteopathic Act.
The rationale for requiring that an LLC be expressly authorized was apparently to ensure that service providers who harm others by their misconduct, incompetence, or negligence should not be able to limit their liability by operating as an LLC and thus become potentially judgment-proof.
Based upon these provisions of law, it has been commonly understood that the boards and bureaus under the Department of Consumer Affairs are prohibited from issuing a license, certification or registration to an entity organized as an LLC.
However, in 2004, an Attorney General Opinion No. 04-103 concluded that a business that provides services requiring a license, certification, or registration pursuant to the Business and Professions Code may conduct its activities as a limited liability company if the services rendered require only a nonprofessional, occupational license.
In discussing the distinctions between professional services and
nonprofessional occupational services, the AG Opinion further
discusses Mann v. Department of Motor Vehicles (1999) 76
Cal.App.4th 312 (Mann), in which the court concluded that the
services performed pursuant to a vehicle salesperson license issued
under the Vehicle Code were not “professional services,” but
rather were “nonprofessional, occupational” services.
Since this AG Opinion has been released, several changes to the Business & Professions Code have been made through the legislature to incorporate limited liability companies into the licensure provisions of several different Boards and Bureaus regulated by the DCA.
SB 392 (Florez, Chapter, 698, Statutes of 2010) was one such
amendment.
SB 392 authorized the Contractors State License
Board to issue a contractor license to an LLC, and incorporated the
LLC business structure into the contractor license provisions. The
bill additionally added paragraph (c) to Corporations Code Section
17002 to read: “(c) Notwithstanding Section 17375, a limited
liability company may render services that may be lawfully rendered
only pursuant to a license, certificate, or registration authorized
by the Business and Professions Code if the applicable provisions of
the Business and Professions Code authorize a limited liability
company to hold that license, certificate, or registration.”
Following closely behind SB 392, SB 1077 (Price, Chapter 291, Statutes of 2012) specifically authorized an LLC to hold an alarm company operator license. The provision was set to be repealed on January 1, 2016 so that the Legislature could evaluate the adequateness of the LLC insurance requirements and enforcement by the Bureau.
This bill would extend the provision that authorizes an LLC to hold an alarm company operator license from its sunset date of January 1, 2016 to January 1, 2022.
Prior Related Legislation. SB 1077 (Price, Chapter 291, Statutes of 2012) Authorized the Bureau to issue an alarm company operator license to a limited liability company (LLC). A failure of a limited liability alarm company to comply with the requirements to submit the company’s information and documentation with the Bureau would subject the company’s license to suspension and would be mandate that any violation of the Alarm Company Act by a limited liability company be considered a crime.
Arguments in Support. Writing in support of the bill, the California Alarm Company Association (CAA) states that the provisions chaptered by SB 1077 in 2012 have been able to grant greater protection for consumers by:
Allowing an alarm company to professionally organize as an LLC only if the company maintains additional insurance requirements to ensure proper consumer protections.
Granting the Bureau greater and direct authority to cite and fine alarm companies operating without a license.
Allowing an alarm company to keep the same alarm license if it changes its business structure (i.e. from a corporation to a LLC) so that the Bureau would not have to process a new application for an alarm company license by the same entity.
Granting alarm companies probationary licenses
CAA seeks to extend the Sunset date from January 1, 2016 to January 1, 2022 on all four of the above listed provisions that SB 1077 put into law in order to properly protect consumers.
NOTE:
Double-referral to Senate Committee on Judiciary.
SUPPORT AND OPPOSITION:
Support:
California Alarm Company Association (Sponsor)
Opposition:
None on file as of April 7, 2015.
-- END --
Discussed in Hearing
1MIN
Senate Floor
2MIN
Senate Floor
1MIN
Senate Standing Committee on Judiciary
Bill Author
Bill Co-Author(s):