AN ACT Relating to licensing; adding a new chapter to Title 19 RCW; and prescribing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature hereby declares it to be in the public interest, and for the protection of the welfare and property of the residents of this state to provide for the regulation of private investigators. It is the purpose of this chapter to provide authority for the director of the department of licensing to license and regulate private investigators.

NEW SECTION. Sec. 2. Unless a different meaning is clearly required by the context the definitions set forth in this section shall apply throughout this chapter.

(1) "Business" shall mean any sole proprietorship, firm, partnership, trust, joint venture, association, corporation, or other business entity.

(2) "Department" shall mean the department of licensing.

(3) "Director" shall mean the director of the department of licensing.

(4) "Licensee" shall mean any business licensed under this chapter.

(5) "Permit holder" shall mean any individual who holds a permit under this chapter.

(6) "Private investigation services" shall mean those duties performed for the purpose of obtaining information on:

(a) Crimes or wrongs done or threatened;

(b) The identity, habits, conduct, movements, whereabouts, associations, transactions, credibility, reputation, employment history, criminal record, or character of any person, group, or business, for any purpose;

(d) The causes and responsibility for fires, libel, slander, losses, accidents, or injuries.

NEW SECTION. Sec. 3. It shall be unlawful for any individual to perform private investigation services without first having applied for and obtained a permit from the director.

NEW SECTION. Sec. 4. (1) No license or any renewal thereof may be granted to any applicant unless:

(a) An individual applicant is at least eighteen years of age;

(b) An applicant is authorized to do business in this state;

(c) The application is complete, the fees required by section 6 of this act have been paid, and the surety bond, cash deposit, or other negotiable security and proof of public liability and property damage insurance acceptable to the director and required by section 11 of this act have been filed with the director.

(2) No license or renewal thereof may be granted if a sole proprietor applicant or an owner, officer, director, or managing employee of an applicant not a sole proprietor:

(a) Has knowingly made a false statement of a material fact in the current application or in any data attached thereto or in any application (or data attached thereto) made under this chapter within two years of the date of the current application;

(b) Has had a license to engage in a business regulated by this chapter permanently revoked by this state or any other state within two years of the date of the current application for any reason other than the nonpayment of licensing fees or failure to meet bonding requirements;

(d) Has been convicted in any court for the illegal use or possession of a dangerous weapon;

(e) Has had any judgment entered in any civil action involving forgery, embezzlement, obtaining money under false pretenses, larceny, extortion, or conspiracy to defraud, and the application is made within five years of the date of the entry of final judgment in the action;

(f) Has committed or knowingly permitted any employee to commit any act while the license was expired that would be grounds for the denial, suspension, or revocation of a license;

(g) Has knowingly advised, encouraged, or assisted in the violation of any court order or injunction during the performance of services for which they were licensed;

(h) Has committed any act while performing services for the licensee's business, where the act constitutes false, deceptive, or misleading representations or fraud upon the licensee's clients or the general public;

(i) Has accepted employment adverse to the interests of a client or former client, when the employment has been secured upon confidential information obtained from or in the course of employment for another client or former client.

(3) Any business that is engaged in investigative activity regulated by this chapter as of the effective date of this act, shall, upon filing the application, paying the fees, filing the surety bond, cash deposit, or other negotiable security in lieu of bond, and upon filing satisfactory proof of public liability and property damage insurance, all as required by this chapter, be issued a license hereunder.

NEW SECTION. Sec. 5. (1) Every application for a license shall be in writing, under oath, and in the form prescribed by the director.

(2) Every application shall contain such relevant information as the director may require.

(3) The applicant shall furnish the director with evidence as the director may reasonably require to establish that the requirements and qualifications for a license have been fulfilled by the applicant.

(4) Every application for a license shall state, among other things that may be required, the name of the applicant with the name under which the applicant will do business and the location by street, number, city, and state of each office of the business for which the license is sought.

(5) No license shall be issued in any fictitious name that may be confused with or that is similar to any federal, state, county, or municipal governmental unit or agency, or in any name that may tend to describe any business function or enterprise not actually engaged in by the applicant, or in any name that is the same as or is so similar to that of any existing licensee as would tend to deceive the public, or in any name that would otherwise tend to be deceptive or misleading: PROVIDED, That the foregoing shall not necessarily preclude the use of a name that may be followed by a geographically descriptive title that would distinguish it from a similar name licensed but operating in a different geographical area.

NEW SECTION. Sec. 6. (1) Each applicant when submitting an application shall pay a licensing fee of one hundred dollars and an investigation fee of one hundred dollars; however, if a license is not issued in response to the application, the one hundred dollar license fee shall be returned to the applicant.

(2) An annual license fee as determined by the director but not to exceed one hundred dollars shall be paid to the director on or before January first of each year. If the annual license fee is not paid on or before January first, the licensee shall be assessed a penalty for late payment in the amount of fifty dollars. If the fee and penalty are not paid by January thirty-first, it will be necessary for the licensee to submit a new application for a license: PROVIDED, That no license shall be issued upon the new application unless and until all fees and penalties previously accrued under this section have been paid.

(3) Any license issued under the provisions of this chapter shall expire on December thirty-first following the issuance thereof.

NEW SECTION. Sec. 7. Each licensee shall maintain at its principal place of business records that shall establish:

(1) The name and address of each permit holder who is or has, within the last two years, been in the employment of the licensee;

(2) Records that shall disclose a description of, and the license number of, each vehicle assigned to or utilized by a permit holder while performing services under a permit; and

(3) The current deployment and assignment of all permit holders employed or retained by the licensee.

NEW SECTION. Sec. 8. (1) Each license, when issued, shall be in the form and size prescribed by the director and shall state in addition to any other matter required by the director:

(a) The name of the licensee;

(b) The name under which the licensee will do business;

(d) The number and expiration date of the license.

(2) A licensee shall display the license in a conspicuous place in the licensee's principal place of business.

NEW SECTION. Sec. 9. Whenever a licensee shall contemplate a change of trade name or a change in the location of the principal place of business, the licensee shall give written notice of the proposed change to the director. Upon the licensee paying a transfer fee to the director of twenty dollars, and upon compliance by the licensee with all provisions of this chapter, the director shall issue a new license reflecting the change of trade name or location.

NEW SECTION. Sec. 10. (1) Except as provided in subsection (2) of this section, a license granted under this chapter is not assignable or transferable.

(2) Upon the death of an individual licensee, the director shall have the right to transfer the license of the decedent to the personal representative of the decedent's estate for the period of the unexpired term of the license and the additional time, not to exceed one year from the date of death of the licensee, as the personal representative may need in order to settle the decedent's estate or to sell the business.

NEW SECTION. Sec. 11. (1) Each applicant shall, at the time of applying for a license, file with the director a surety bond in the sum of five thousand dollars. The bond shall be annually renewable on January first of each year, shall be approved by the director as to form and content, and shall be executed by the applicant as principal and by a surety company authorized to do business in this state as surety. The bond shall run to the state as obligee for the benefit of the state and condition that the licensee shall faithfully and truly perform all agreements entered into with the licensee's clients or customers. The bond required by this section shall remain in effect until canceled by action of the surety, the licensee, or the director.

(2) An applicant for a license under this chapter may furnish, file, and deposit with the director, in lieu of the surety bond set forth in subsection (1) of this section, a cash deposit or other negotiable security acceptable to the director. The security deposited with the director in lieu of the surety bond shall be returned to the licensee at the expiration of one year after the license has expired or been revoked if no legal action has been instituted against the licensee or on the security deposit at the expiration of the one-year period.

(3) A surety shall file with the director notice of withdrawal on the bond of the licensee. Upon filing a new bond, revocation of the license, or the expiration of sixty days after the filing of notice of withdrawal as surety by the surety, the liability of the former surety for all future acts of the licensee shall terminate.

(4) The director shall immediately cancel the bond given by a surety company upon being advised that the surety company's license to transact business in this state has been revoked.

(5) Upon the filing with the director of notice by a surety of withdrawal as the surety on the bond of a licensee or the cancellation by the director of the bond of a surety as set forth in subsection (4) of this section, the director shall immediately give notice to the licensee of the withdrawal or cancellation. The notice shall be sent to the licensee by registered or certified mail with request for a return receipt and addressed to the licensee at his or her main office as shown by the records of the director. Upon the expiration of thirty days from the date of mailing the notice, the license of the licensee shall be terminated, unless the licensee has filed a new bond with a surety satisfactory to the director.

(6) All bonds given under this chapter shall be filed and held in the office of the director.

(7) At the time of application, the applicant for a license shall furnish to the director satisfactory evidence that the applicant has procured and has in effect public liability and property damage insurance covering the applicant's operations for the following sums: (a) Not less than fifty thousand dollars for injury or damage to property; (b) not less than one hundred thousand dollars for injury or damage to any one person, including death to any one person; and (c) not less than three hundred thousand dollars for injury or damage to more than one person, including death.

(8) An applicant for a license or a licensee shall notify the director whenever the public liability and property damage insurance required in subsection (7) of this section shall cease to be effective. In the event such insurance shall cease to be effective, the application for license shall be rejected by the director, or if the license has been granted, it shall be suspended until such insurance is reinstated.

NEW SECTION. Sec. 12. In addition to all other legal remedies, an action may be brought in any court of competent jurisdiction upon the bond, cash deposit, or security in lieu thereof, required by section 11 of this act, by any person to whom the licensee fails to account and pay as set forth in the bond or by any client or customer of the licensee who has been damaged by failure of the licensee to comply with all agreements entered into with the client or customer. The aggregate liability of the surety to all clients or customers shall in no event exceed the sum of the bond.

An action upon the bond or security shall be commenced by serving and filing of a complaint within one year from the date of the cancellation of the bond or, in the case of a cash deposit or other security deposited in lieu of the surety bond, within one year of the date of expiration or revocation of the license. No action shall be maintained upon the bond, cash deposit, or other security for any claim that has been barred by any nonclaim statute or statute of limitations of this state. Two copies of the complaint shall be served by registered or certified mail upon the director at the time the suit is started. Service on the director shall constitute service on the surety. The director shall transmit one of the copies of the complaint served on the director to the surety within forty-eight hours after it shall have been received.

The director shall maintain a record, available for public inspection, of all suits commenced under this chapter upon surety bonds, cash, or other security deposited in lieu thereof.

In the event of a judgment being entered against the deposit or security referred to in section 11(2) of this act, the director shall, upon receipt of a certified copy of a final judgment, pay the judgment from the amount of the deposit or security.

NEW SECTION. Sec. 13. (1) It shall be unlawful, either directly or indirectly or by implication, for a licensee to represent himself or herself or the licensee's employees as an instrumentality of the federal or state government or of any of their political subdivisions.

(2) It shall be unlawful for the licensee or any of the licensee's employees to use any uniform, insignia, badge, shield, business card, stationary, identification card, initials, business name, or any other device, object, or apparel that may be interpreted by members of the general public to mean that such licensee or employees represent the federal or state government or any of their political subdivisions.

(3) It shall be unlawful for any licensee or any of the licensee's employees to engage in any acts, practices, or conduct that delays or obstructs the operations or activities of public law enforcement or public safety officials of the state.

(4) It shall be unlawful for the licensee or any of the licensee's employees to carry a visible weapon or wear any uniform, insignia, or any other accouterment commonly worn by public law enforcement officers while making a sales presentation to members of the general public.

(5) It shall be unlawful for any licensee or any of the licensee's employees to use sirens, flashing emergency lights, or any other emergency equipment commonly used by public law enforcement agencies on vehicles owned or subject to the control of the licensee or any of the licensee's employees, except as authorized by the state commission on equipment.

(6) It shall be unlawful for any licensee or any of the licensee's employees while performing any duties or functions described in this chapter to have on his or her person a badge or shield as described in subsection (2) of this section.

NEW SECTION. Sec. 14. Every individual performing private investigation services in this state shall apply for and obtain a permit from the department. The permit fee shall be fifteen dollars per annum.

NEW SECTION. Sec. 15. An application for a permit required by section 14 of this act shall be in writing by a person eighteen years of age or older and in the form prescribed by the director and shall be verified on oath by the applicant. The application shall include:

(1) The name, address, date of birth, and social security number of the applicant;

(2) Three recent photographs of the applicant and a classifiable set of finger prints;

(3) A list of any criminal convictions;

(4) Whether or not a firearm will be used in connection with the permit holder's duties as a permit holder;

(5) Educational background;

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

NEW SECTION. Sec. 16. The director may deny a permit to any applicant, if such applicant has:

(1) Committed any act resulting in conviction of, or has charges pending for a felony or of a crime that relates directly to the application;

(2) Made any false statements in the application;

(3) Committed any act which, if committed by a permit holder, would be grounds for the suspension or revocation of a permit under this chapter;

(4) While not holding a permit, committed or aided and abetted the commission of any act for which a permit is required by this chapter;

(5) Been refused a permit or had a permit suspended or revoked pursuant to this chapter. Any applicant denied a permit pursuant to this chapter, may reapply after six months if the basis for the denial has been removed.

NEW SECTION. Sec. 17. The director shall suspend or revoke any permit issued if the applicant has:

(1) Made any false statement with regard to an application for a permit, for a renewal, or reinstatement of a permit;

(2) Violated any provision of this chapter;

(3) Been convicted of a felony or any crime relating directly to the license while in possession of a permit;

(4) Illegally used, carried, or possessed a dangerous weapon;

(5) Committed any act while the permit was expired that would be grounds for the denial, suspension, or revocation of a permit;

(6) Knowingly advised, encouraged, or assisted in the violation of any court order or injunction during the performance of services for which the applicant has a permit;

(7) Accepted employment adverse to the interests of a client or former client, when the employment has been secured upon confidential information obtained from or in the course of employment for another client or former client.

NEW SECTION. Sec. 18. Every permit holder shall have his or her permit in his or her immediate possession at all times while actively engaged in employment regulated by this chapter and shall display the same upon demand to any law enforcement officer or representative of the department.

NEW SECTION. Sec. 19. Before granting any license or permit authorized by this chapter the director shall cause the applicant's name, photograph, and fingerprints to be submitted to the section on identification of the state patrol for the purpose of verifying the applicant's criminal record or lack thereof.

NEW SECTION. Sec. 20. The director shall promulgate, in accordance with chapter 34.04 RCW, such procedures and rules as may be necessary to carry out the provisions of this chapter.

NEW SECTION. Sec. 21. (1) Any person violating or wilfully failing to comply with any provision of this chapter shall upon conviction be fined not more than one thousand dollars or imprisoned for not more than one year or both.

(2) Nothing in this chapter limits the power of the state to punish any person for conduct that constitutes a crime by statute or at common law.

NEW SECTION. Sec. 22. The legislature hereby preempts the licensing and regulation of occupations and businesses regulated pursuant to the provisions of this chapter, and on and after the effective date of this act, all regulations of any city, town, or county are hereby declared to be superseded.

NEW SECTION. Sec. 23. The director shall establish rules and procedures by which necessary coordination between public law enforcement and private investigation services may be improved through notification of local law enforcement authorities within their jurisdictions.

NEW SECTION. Sec. 24. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 25. Sections 1 through 24 of this act shall constitute a new chapter in Title 19 RCW.