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AB-580 Security services: limited liability companies.(2017-2018)

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Date Published: 04/03/2017 09:00 PM
AB580:v98#DOCUMENT

Amended  IN  Assembly  April 03, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill
No. 580


Introduced by Assembly Member Cunningham

February 14, 2017


An act to amend Section 5003 of Sections 7574.01, 7582.7, 7582.13, 7582.24, 7582.25, and 7582.26 of, and to add Section 7582.30 to, the Business and Professions Code, relating to professions and vocations.


LEGISLATIVE COUNSEL'S DIGEST


AB 580, as amended, Cunningham. Accountants. Security services: limited liability companies.
The California Revised Uniform Limited Liability Company Act governs the formation and operation of limited liability companies. The act authorizes a limited liability company to engage in any lawful business activity, except as specified. A limited liability company is an entity distinct from its members. Existing law authorizes one or more persons to form a limited liability company by, among other things, signing and delivering articles of organization to the Secretary of State. Under existing law, a limited liability company is a member-managed limited liability company unless the articles of organization contain a statement that the limited liability company is to be manager managed. Under existing law, the operating agreement governs, among other things, relations among the members as members and between the members and the limited liability company and the activities of the limited liability company. Existing law authorizes a limited liability company to render services that may be lawfully rendered only pursuant to a license, certificate, or registration authorized by the Business and Professions Code if the provisions of that code authorize a limited liability company to hold that license, certificate, or registration.
The Private Security Services Act in the Business and Professions Code provides for the licensure and regulation by the Department of Consumer Affairs and its Bureau of Security and Investigative Services of persons engaged in the provision of private security services. The Private Security Services Act authorizes an individual, a qualified manager, a partner of a partnership, or an officer of a corporation to apply for a license, as prescribed. Under the Private Security Services Act, an application is required to be verified and contain specific information, including an identification form signed under penalty of perjury, and is also required to be subscribed, verified, and signed by specific persons under penalty of perjury.
This bill would additionally authorize a limited liability company to apply for licensure and make conforming changes to the provisions of the Private Security Services Act. The bill would require a limited liability company, as a condition of licensure, to be insured as prescribed. The bill, by additionally imposing perjury provisions on limited liability company applicants, would expand the crime of perjury, thereby imposing a state-mandated local program.
The Proprietary Security Services Act provides for the registration and regulation of proprietary private security officers and proprietary private security employers by the department and bureau. The Proprietary Security Services Act defines terms for its purposes, including defining “person” to include any individual, firm, company, association, organization, partnership, and corporation.
This bill would expand the definition of “person” to include a limited liability company.
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.

Existing law provides for the licensure and regulation of the practice of accountancy by the California Board of Accountancy, which is within the Department of Consumer Affairs. Existing law provides that the officers of the board are a president, vice president, and a secretary-treasurer.

This bill would make nonsubstantive changes to these provisions.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NOYES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 7574.01 of the Business and Professions Code is amended to read:

7574.01.
 For the purposes of this chapter, the following terms shall have the following meanings:
(a) “Bureau” means the Bureau of Security and Investigative Services.
(b) “Chief” means the Chief of the Bureau of Security and Investigative Services.
(c) “Director” means the Director of Consumer Affairs, unless the context indicates otherwise.
(d) “Person” includes any individual, firm, company, limited liability company, association, organization, partnership, and corporation.
(e) “Proprietary private security employer” means a person who has one or more employees who provide security services for the employer and only for the employer. A person who employs proprietary private security officers pursuant to this chapter at more than one location shall be considered a single employer.
(f) “Proprietary private security officer” means an unarmed individual who is employed exclusively by any one employer whose primary duty is to provide security services for his or her employer, whose services are not contracted to any other entity or person, and who is not exempt pursuant to Section 7582.2, and who meets both of the following criteria:
(1) Is required to wear a distinctive uniform clearly identifying the individual as a security officer.
(2) Is likely to interact with the public while performing his or her duties.
(g) “Registrant” means an individual registered with the bureau under this chapter.

SEC. 2.

 Section 7582.7 of the Business and Professions Code is amended to read:

7582.7.
 An application shall be verified and shall include:
(a) The full name and business address of the applicant.
(b) The name under which the applicant intends to do business.
(c) A statement as to the general nature of the business in which the applicant intends to engage.
(d) A statement as to the type of license for which the applicant is applying.
(e) A verified statement of his or her experience qualifications.
(f) (1) If the applicant is an individual, a qualified manager, a partner of a partnership, or an officer of a corporation designated in subdivision (i), or a manager or managing member of a limited liability company designated in subdivision (j), one personal identification form provided by the bureau 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, on a form approved by the Department of Justice, and a personal description of each person, respectively. The identification form shall include residence addresses and employment history for the previous five years and be signed under penalty of perjury.
(2) 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.
(g) In addition, if the applicant for a license is an individual, the application shall list all other names known as or used during the past 10 years and shall state that the applicant is to be personally and actively in charge of the business for which the license is sought, or if any other qualified manager is to be actively in charge of the business, the application shall be subscribed, verified, and signed by the applicant, under penalty of perjury, and if any other person is to be actively in charge of the business, the application shall also be subscribed, verified, and signed by that person under penalty of perjury.
(h) If the applicants for license are copartners, the application shall state the true names and addresses of all partners and the name of the partner to be actively in charge of the business for which the license is sought; and list all other names known as or used during the past 10 years, or if a qualified manager other than a partner is to be actively in charge of the business, then the application shall be subscribed, verified, and signed by all of the partners under penalty of perjury, and if any other person is to be actively in charge of the business, the application shall also be subscribed, verified, and signed by that person, under penalty of perjury, under penalty of perjury by all of the partners and qualified manager, or by all of the partners or the qualified manager.
(i) If the applicant for license is a corporation, the application shall state the true names, and complete residence addresses of the chief executive officer, secretary, chief financial officer, and any other corporate officer who will be active in the business to be licensed. The application shall also state the name and address of the designated person to be actively in charge of the business for which the license is sought. The application shall be subscribed, verified, and signed by a duly authorized officer of the applicant and by the qualified manager thereof, under penalty of perjury.
(j) If the applicant for a license is a limited liability company, the application shall state the true name and complete residence address of each manager or managing member and any other officer or member who will be active in the business to be licensed. A copy of the most recent articles of organization, as filed by the Secretary of State, shall be supplied to the bureau upon request. The application shall also state the name and residence address of the designated person to be actively in charge of the business for which the license is sought. The application shall be subscribed, verified, and signed by a duly authorized manager or managing member of the applicant under penalty of perjury.

(j)

(k) Any other information, evidence, statements, or documents as may be required by the director.

SEC. 3.

 Section 7582.13 of the Business and Professions Code is amended to read:

7582.13.
 Upon the issuance of a license, a pocket card of the size, design, and content determined by the director shall be issued to each licensee, if an individual, or if the licensee is a person other than an individual, to its manager or managing member and to each of its officers and partners. The pocket card is evidence that the licensee is licensed pursuant to this chapter. The card shall contain the signature of the licensee, signature of the chief, and a photograph of the licensee, or bearer of the card, if the licensee is other than an individual. The card shall clearly state that the person is licensed as a private patrol operator or is the manager manager, managing member, or officer of the licensee. The applicant may request to be issued an enhanced pocket card that shall be composed of a durable material and may incorporate technologically advanced security features. The bureau may charge a fee sufficient to reimburse the department’s costs for furnishing the enhanced pocket card. The fee charged may shall not exceed the actual costs for system development, maintenance, and processing necessary to provide this service, and may not exceed six dollars ($6). If the applicant does not request an enhanced card, the department shall issue a standard card at no cost. When a person to whom a card is issued terminates his or her position, office, or association with the licensee, the card shall be surrendered to the licensee and within five days thereafter shall be mailed or delivered by the licensee to the bureau for cancellation. Every person, while engaged in any activity for which registration is required, shall display their valid pocket card as provided by regulation.

SEC. 4.

 Section 7582.24 of the Business and Professions Code is amended to read:

7582.24.
 After a hearing the director may deny a license unless the applicant makes a showing satisfactory to the director that the applicant, if an individual, has not, or if the applicant is a person other than an individual, that its manager and each of its officers or managing members have not:
(a) Committed any act, which, if committed by a licensee, would be a ground for the suspension or revocation of a license under this chapter.
(b) Committed any act constituting dishonesty or fraud.
(c) Committed any act or crime constituting grounds for denial of licensure under Section 480, including illegally using, carrying, or possessing a deadly weapon.
(d) Been refused a license under this chapter or had a license revoked.
(e) 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 revoked.
(f) While unlicensed committed, or aided and abetted the commission of, any act for which a license is required by this chapter.
(g) Knowingly made any false statement in his or her application.

SEC. 5.

 Section 7582.25 of the Business and Professions Code is amended to read:

7582.25.
 The director may refuse to issue any license provided for in this chapter to any person:
(a) Who has had any license revoked, or whose license is under suspension, or has failed to renew his or her license while it was under suspension.
(b) If any member of any partnership, or any officer or director of any corporation, or any officer or person acting in a managerial capacity of any firm or association association, or any manager or managing member of a limited liability company has had any license issued to him or her revoked, or whose license is under suspension, or who has failed to renew his or her license while it was under suspension.
(c) If any member of the partnership, or any officer or director of the corporation, or any officer or person acting in a managerial capacity of the firm or association, or any manager or managing member of a limited liability company, was either a member of any partnership, or an officer or director of any corporation, or an officer or person acting in a managerial capacity of any firm or association, or a manager or managing member of a limited liability company, whose license has been revoked, or whose license is under suspension, or who failed to renew a license while it was under suspension, and while acting as such member, officer, director, manager, or person acting in a managerial capacity participated in any of the prohibited acts for which any such license was revoked or suspended.

SEC. 6.

 Section 7582.26 of the Business and Professions Code is amended to read:

7582.26.
 (a) Any licensee or officer, director, partner, managing member, or manager of a licensee may divulge to any law enforcement officer or district attorney, or his or her representative, any information he or she may acquire as to any criminal offense, but he or she shall not divulge to any other person, except as he or she may be required by law so to do, law, any information acquired by him or her except at the direction of the employer or client for whom the information was obtained.
(b) No licensee or officer, director, 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 was being obtained.
(c) No written report shall be submitted to a client except by the licensee, qualifying manager, managing member or manager or a person authorized by one or either of them, and the person submitting the report shall exercise diligence in ascertaining whether or not the facts and information in the report are true and correct.
(d) No licensee, or officer, director, partner, managing member, manager, or employee of a licensee, shall use a title, or wear a uniform, or use an insignia, or use an identification card, or make any statement with the intent to give an impression that he or she is connected in any way with the federal government, a state government, or any political subdivision of a state government.
(e) No licensee, or officer, director, partner, managing member, manager, or employee of a licensee, shall enter any private building or portion thereof, except premises commonly accessible to the public, without the consent of the owner or of the person in legal possession thereof.
(f) No private patrol licensee or officer, director, partner, managing member, manager, or employee of a private patrol licensee shall use or wear a badge, except while engaged in guard or patrol work and while wearing a distinctive uniform. A private patrol licensee or officer, director, partner, managing member, manager, or employee of a private patrol licensee wearing a distinctive uniform shall wear a patch on each shoulder of his or her uniform that reads “private security” and that includes the name of the private patrol company by which the person is employed or for which the person is a representative and a badge or cloth patch on the upper left breast of the uniform. All patches and badges worn on a distinctive uniform shall be of a standard design approved by the director and shall be clearly visible.
The director may assess a fine of two hundred fifty dollars ($250) per violation of this subdivision.
(g) No licensee shall permit an employee or agent in his or her own name to advertise, engage clients, furnish reports or present bills to clients, or in any manner whatever conduct business for which a license is required under this chapter. All business of the licensee shall be conducted in the name of and under the control of the licensee.
(h) No licensee shall use a fictitious name in connection with the official activities of the licensee’s business.
(i) No private patrol operator licensee or officer, director, partner, managing member, or manager of a private patrol operator licensee, or person required to be registered as a security guard pursuant to this chapter shall use or wear a baton or exposed firearm as authorized by this chapter unless he or she is wearing a uniform which that complies with the requirements of Section 7582.27.

SEC. 7.

 Section 7582.30 is added to the Business and Professions Code, to read:

7582.30.
 (a) As a condition of the issuance, reinstatement, reactivation, or continued valid use of a license under this chapter, a limited liability company shall maintain in accordance with this section 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 private investigator services it provides.
(b) The limited liability company licensed as a private patrol operator shall maintain general liability insurance and render proof of insurance as required by Sections 7583.39 to 7583.42, inclusive.

SEC. 8.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B 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 XIII B of the California Constitution.
SECTION 1.Section 5003 of the Business and Professions Code is amended to read:
5003.

The officers of the board are a president, vice president, and a secretary-treasurer.