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AN ACT relating to private investigators.
it enacted by the General Assembly
of the Commonwealth of Kentucky:
SECTION 1. KRS CHAPTER 329A IS ESTABLISHED AND A NEW SECTION THEREOF IS CREATED TO READ AS FOLLOWS:
As used in Sections 1 to 17 of this Act:
(1) "Board" means the Kentucky Board of Licensure for Private Investigators;
(2) "Company" means a firm, association, sole proprietorship, partnership, corporation, nonprofit organization, institution, or similar enterprise;
(3) "Investigating company" or "company licensee" means a company engaged in private investigating that is licensed under Sections 1 to 17 of this Act;
(4) "Private investigating" means the act of any individual or company engaging in the business of obtaining or furnishing information with reference to:
(a) Crime or wrongs done or threatened against the United States or any state or territory of the United States;
(b) The identity, habits, conduct, business, occupation, honesty, integrity, credibility, knowledge, trustworthiness, efficiency, loyalty, activity, movement, whereabouts, affiliations, associations, transactions, acts, reputations, or character of any person;
(c) The location, disposition, or recovery of lost or stolen property;
(d) The cause or responsibility for fires, losses, accidents, damages, or injuries to persons or to property;
(5) "Private investigator" or "individual licensee" means a person who is engaged in private investigating and licensed in accordance with the provisions of Sections 1 to 17 of this Act; and
(6) "Qualifying agent" means a principal corporate officer, such as the chief executive officer, president, vice president, treasurer-secretary, comptroller, or any other responsible officer or executive employee, who is designated by the corporation to represent it in matters relating to Sections 1 to 17 of this Act.
SECTION 2. A NEW SECTION OF KRS CHAPTER 329A IS CREATED TO READ AS FOLLOWS:
No person or company shall hold himself or herself out to the public as a private investigator or use any terms, titles, or abbreviations that express, infer, or imply that the person is licensed as a private investigator unless the person at the time holds a license to practice private investigating issued and validly existing under the laws of this Commonwealth as provided in this chapter. All applicants shall pass a criminal background check based on criteria established under Section 6 of this Act.
SECTION 3. A NEW SECTION OF KRS CHAPTER 329A IS CREATED TO READ AS FOLLOWS:
(1) The Kentucky Board of Licensure for Private Investigators is hereby created.
(2) The board shall consist of seven (7) members appointed by the Governor.
(a) One (1) member shall be an attorney from the office of the Attorney General to be designated by the Attorney General;
(b) One (1) member shall be a municipal police officer of the rank of captain or above;
(c) One (1) member shall be a county sheriff;
(d) Three (3) members shall each have been private investigators for at least five (5) years prior to the date of their appointment and shall be of recognized business standing; and
(e) One (1) member shall be a citizen at large who is not associated with or financially interested in the practice of private investigating.
(3) All members shall be residents of this state and possess good moral character.
(4) The original members of the board shall be appointed by no later than January 1, 2003, as follows:
(a) One (1) member to a one (1) year term;
(b) Two (2) members to a two (2) year term;
(c) Two (2) members to a three (3) year term; and
(d) Two (2) members to a four (4) year term.
(5) After the initial appointments to the board, all members shall serve a two (2) year term.
(6) Any vacancy occurring on the board shall be filled by the Governor.
(7) No member may serve more than two (2) full consecutive terms.
(8) The three (3) board members who are private investigators and the member at large shall receive the sum of one hundred dollars ($100) per day for each day the board meets. All members shall receive reimbursement for actual and necessary expenses incurred in the performance of their official duties.
(9) The board shall annually elect a chairman, a vice chairman, and a secretary-treasurer from the membership of the board.
(10) The board shall hold at least two (2) meetings annually and additional meetings as the board may deem necessary. Additional meetings may be held upon call of the chairman or upon written request of a quorum. Four (4) members of the board shall constitute a quorum to conduct business.
(11) Upon recommendation of the board, the Governor may remove any member of the board for neglect of duty or malfeasance in office.
(12) The board may purchase professional liability insurance for the board members and agents and staff of the board.
SECTION 4. A NEW SECTION OF KRS CHAPTER 329A IS CREATED TO READ AS FOLLOWS:
(1) The board shall administer and enforce the provision of Sections 1 to 17 of this Act and shall evaluate the qualifications of applicants for licensure and issue licenses.
(2) The board shall:
(a) Implement the provisions of Sections 1 to 17 of this Act through the promulgation of administrative regulations in accordance with the provisions of KRS Chapter 13A;
(b) Promulgate administrative regulations to establish fees which shall not exceed the amounts necessary to generate sufficient funds to effectively carry out and enforce the provisions of Sections 1 to 17 of this Act;
(c) Promulgate by administrative regulation an examination to be administered at least twice annually to license applicants. The examination shall be designed to measure knowledge and competence in private investigating including, but not limited to, the following subject areas:
1. Federal and state constitutional principles;
2. Court decisions related to activities which could result in liability for the invasion of privacy or other activities;
3. Eavesdropping and related offenses, assault and related offenses, search and seizure laws, and laws regarding unlawful access to a computer;
4. General weapons use and concealed weapons laws;
5. Additional state criminal laws and related procedures that are relevant to the practice of private investigating; and
6. Additional subject areas as determined by the board; and
(d) Promulgate by administrative regulation a code of professional practice and conduct that shall be based upon generally recognized principles of professional ethical conduct and be binding upon all licensees.
(3) The board may:
(a) Contract with the Division of Occupations and Professions within the Finance and Administration Cabinet for the provision of administrative services;
(b) Employ any persons it deems necessary to carry on the work of the board. The board may define their duties and fix their compensation;
(c) Develop or sponsor at least six (6) hours of continuing professional education annually;
(d) Approve and certify a forty (40) hour training class covering the subject areas of the licensing examination;
(e) Renew licenses and require continuing professional education as a condition for renewal;
(f) Suspend or revoke licenses, impose supervisory or probationary conditions upon licensees, impose administrative disciplinary fines, or issue written admonishments or reprimands, or any combination thereof;
(g) Issue subpoenas, examine witnesses, pay appropriate witness fees, administer oaths, and investigate allegations of practices violating the provisions of Sections 1 to 17 of this Act;
(h) Conduct hearings pursuant to KRS Chapter 13B and keep records and minutes necessary to carry out the board's functions;
(i) Organize itself into two (2) panels to separate the functions of inquiry and hearings. Each panel shall have the power to act as either an inquiry or hearing panel. No member serving on the inquiry panel shall serve on the hearing panel for any one (1) particular case. Any final decision of the hearing panel shall be considered as the final decision of the board and the hearing panel may exercise all powers granted to the board pursuant to KRS Chapter 13B;
(j) Utilize mediation as a technique to resolve disciplinary matters;
(k) Seek injunctive relief in the Circuit Court of the county where the alleged unlawful practice occurred to stop the unlawful practice of private investigating by unlicensed persons or companies; and
(l) Negotiate and enter into reciprocal agreements with appropriate officials in other states to permit licensed investigation companies and private investigators who meet or exceed the qualifications established in Sections 1 to 17 of this Act to operate across state lines under mutually acceptable terms.
SECTION 5. A NEW SECTION OF KRS CHAPTER 329A IS CREATED TO READ AS FOLLOWS:
(1) All fees and other moneys received by the board pursuant to the provisions of Sections 1 to 17 of this Act shall be deposited in the State Treasury to the credit of a revolving fund for the use of the board.
(2) No part of this revolving fund shall revert to the general fund of this Commonwealth.
(3) The revolving fund may be used to pay for:
(a) The compensation and reimbursement of board members for actual and necessary expenses incurred in the performance of official duties;
(b) The compensation of all of the employees of the board;
(c) Those operational and capital expenses incurred in fulfilling the board's duties as described in Sections 1 to 17 of this Act and in administrative regulations; and
(d) The development or sponsorship of at least six (6) hours of continuing education courses annually, to be conducted in various areas of the state.
SECTION 6. A NEW SECTION OF KRS CHAPTER 329A IS CREATED TO READ AS FOLLOWS:
(1) An application for a private investigator license shall be filed with the board on the prescribed form.
(a) The application shall include the following information regarding the applicant:
1. Full name and address;
2. Date and place of birth;
3. Social Security number;
4. All residences during the past five (5) years;
5. All employment or occupations engaged in during the past five (5) years;
6. Three (3) sets of classifiable fingerprints;
7. Three (3) credit references from lending institutions or business firms with whom the subject has established a credit record; and
8. Any other information as the board may reasonably require by administrative regulation.
(b) The application shall be subscribed and sworn to by the applicant.
(2) An application for an investigating company license shall be filed with the board on the prescribed form.
(a) The application shall include:
1. The information required in subsection (1)(a) of this section for:
a. The owner, if the company is a sole proprietorship;
b. Each partner, if the company is a partnership; or
c. The qualifying agent, if the company is a corporation;
2. The name under which the company intends to do business;
3. The address of the principal place of business and any branch offices of the company within this state; and
4. Other information as the board may reasonably require by administrative regulation.
(b) If the company is a corporation, the following information is also required:
1. The correct legal name of the corporation;
2. The state and date of incorporation;
3. The date the corporation qualified to do business in this state;
4. The address of the corporate headquarters, if located outside of this state;
5. The names of two (2) principal corporate officers other than the qualifying agent, their business addresses, residence addresses, and the office held by each in the corporation; and
6. The identity and license number of all private investigators employed by or affiliated with the company.
(c) The application shall be subscribed and sworn to by:
1. The owner, if the applicant is a sole proprietorship;
2. Each partner, if the applicant is a partnership; or
3. The qualifying agent, if the applicant is a corporation.
(3) Each applicant for an individual license or owner, partner, or qualifying agent for a company license shall:
(a) Be at least twenty-one (21) years of age;
(b) Be a citizen of the United States or a resident alien;
(c) Have a high school education or its equivalent;
(d) Not receive a license until the earlier of:
1. The expiration of ten (10) years from the applicant's release from a sentence imposed by any state or territory of the United States or the federal government for the commission of a felony, including a sentence of confinement or time served on probation, parole, or other form of conditional release or discharge; or
2. The date the applicant received a restoration of the applicant's civil rights;
(e) Not have been convicted of a misdemeanor involving moral turpitude or for which dishonesty is a necessary element within the previous five (5) years;
(f) Not have been dishonorably discharged from any branch of the Armed Forces of the United States;
(g) Not have had his or her certification as a peace officer revoked in this or another state;
(h) Not have been declared by any court of competent jurisdiction to be incompetent by reason of mental defect or disease unless a court of competent jurisdiction has since declared the applicant to be competent;
(i) Not have been voluntarily or involuntarily committed to a facility or outpatient program for the abuse of a controlled substance or been convicted of a misdemeanor violation of KRS Chapter 218A or similar laws of any other state relating to controlled substances within the three (3) year period immediately preceding the date on which the application is submitted;
(j) Not chronically and habitually use alcoholic beverages as evidenced by:
1. The applicant having two (2) or more convictions for violating KRS 189A.010 within the three (3) year period immediately preceding the date on which the application is submitted; or
2. The applicant having been committed as an alcoholic pursuant to KRS Chapter 222, or similar laws of any other state, within the three (3) year period immediately preceding the date on which the application is submitted;
(k) Not chronically and habitually use alcoholic beverages or drugs to the extent that his or her normal faculties are impaired;
(l) Be of good moral character;
(m) Pass an examination administered by the board in accordance with subsection (2)(c) of Section 4 of this Act; and
(n) Submit proof of coverage which meets the following requirements:
1. Is written by an insurance company which is lawfully engaged to provide insurance coverage in Kentucky;
2. Provides for a combined single-limit policy in the amount of at least two hundred fifty thousand dollars ($250,000); and
3. Insures for liability all of the applicant's employees while acting in the course of their employment.
Private investigators who limit their practice exclusively to working under the supervision of an attorney who is licensed to practice law in this state are exempted from the requirement of this paragraph.
(4) The board shall maintain the confidentiality of information relating to the licensee, except that the board may provide this information to local, state, or federal law enforcement agencies.
SECTION 7. A NEW SECTION OF KRS CHAPTER 329A IS CREATED TO READ AS FOLLOWS:
(1) Upon receipt of a license application, accompanied by a nonrefundable, nonproratable fee of not less than one hundred dollars ($100) and not more than five hundred dollars ($500), as established by the board by promulgation of administrative regulations, the board shall:
(a) Conduct an investigation to determine whether the statements made in the application are true; and
(b) Submit the application, including fingerprints as appropriate, to the Kentucky State Police and the Administrative Office of the Courts for a state criminal history background check. The Kentucky State Police may submit fingerprints of any applicant to the Federal Bureau of Investigation for a national criminal history background check. The board may by administrative regulation impose additional qualifications to meet the requirements of Pub. L. No. 92-544. The applicant for licensure shall bear the additional cost, in an amount not to exceed the actual cost, incurred for the criminal background check.
(2) Following the investigation process, the board shall either deny or approve the application.
(a) If the application for a license is denied, the board:
1. Shall notify the applicant in writing and set forth the grounds for denial. If the grounds are subject to correction by the applicant, the notice of denial shall so state and specify a reasonable period of time within which the applicant must make the correction; and
2. Shall grant a hearing to the denied applicant in accordance with the provisions of KRS Chapter 13B.
(b) If the application for a license is approved, the board shall issue:
1. A license to be posted conspicuously in the licensee's principal place of business; and
2. A wallet-sized laminated identification card to each individual licensee to be carried while engaged in private investigation. Information on the card shall include the expiration date of the license and the licensee's:
c. Physical characteristics; and
d. License number.
(3) A license or identification card issued under subsection (2) of this section is not assignable and is personal to the licensee.
SECTION 8. A NEW SECTION OF KRS CHAPTER 329A IS CREATED TO READ AS FOLLOWS:
(1) A license or renewal issued under Sections 1 to 17 of this Act shall be valid for two (2) years from the date of issuance. No later than May 1 in the license renewal year, the board shall send a renewal application form to the address on file for each licensee. The renewal application shall indicate if the licensee is required to submit passport-sized photographs for a new identification card.
(2) All renewal applications shall be received by the board on or before June 30 in the year of renewal.
(3) Each company license renewal shall include a notarized statement sworn to by the representative prescribed in subsection (2)(c) of Section 6 of this Act stating the identity and license number of each private investigator employed by or affiliated with the company.
(4) The fee for the timely renewal of a license shall be not less than fifty dollars ($50) and not more than two hundred fifty dollars ($250), as established by the board by promulgation of administrative regulations.
(5) For individual licensees, the board shall, at its discretion, issue either a new identification card or a renewal stamp or sticker to be affixed to the existing card.
(6) A grace period shall be allowed until September 1 of the license renewal year, during which time licensees may continue to practice and may renew their licenses upon payment of the renewal fee plus a late fee as promulgated by administrative regulation of the board.
(7) All licenses not renewed by September 1 of the renewal year shall terminate based on the failure to renew in a timely manner. Upon termination, the licensee is no longer eligible to practice in this state.
(8) After September 1 of the renewal year, former licensees with a terminated license may have their licenses reinstated upon payment of the renewal fee plus a reinstatement fee as promulgated by administrative regulation of the board. If the reinstatement application is made within five (5) years from the date of termination, applicants shall not be required to submit to any examination as a condition for reinstatement.
(9) A revoked license may not be renewed. If it is reinstated, the licensee shall pay the reinstatement fee as set forth in subsection (8) of this section and the renewal fee as set forth in subsection (4) of this section.
(10) A former licensee who fails to reinstate a license within five (5) years after termination may not have it renewed, restored, or reinstated. A person may apply for and obtain a new license by meeting the current requirements for licensure.
(11) The board may require that a person applying for a renewal or reinstatement of licensure show evidence of completion of continuing professional education as prescribed by the board in administrative regulations.
(12) A valid license may be put on inactive status by the licensee at the time of renewal, at a cost to be determined by the board.
SECTION 9. A NEW SECTION OF KRS CHAPTER 329A IS CREATED TO READ AS FOLLOWS:
(1) If the ownership of an investigating company changes, the new owner, if not already a licensee, shall not operate that company more than thirty (30) days after the date of the ownership change unless, within the thirty (30) day period, the new owner submits an application for a license.
(a) If the application is submitted, the new owner may continue to operate the company until the application has been finally determined by the board.
(b) The board may extend for a reasonable time the period for submitting an application under this subsection.
(2) If the qualifying agent of a company ceases to perform the duties of an agent on a regular basis, the licensee shall notify the board by certified or registered mail within thirty (30) days and substitute a new qualifying agent within ninety (90) days. The board may extend for a reasonable time the period for obtaining a substitute qualifying agent.
SECTION 10. A NEW SECTION OF KRS CHAPTER 329A IS CREATED TO READ AS FOLLOWS:
No licensee shall:
(1) Use a badge for identification or make any statement which would reasonably cause another person to believe that the licensee functions as a sworn peace officer or other official of the state, any of its political subdivisions, or an agency of the federal government;
(2) Divulge to anyone, other than his or her client, or to such persons as his or her client may direct, or as may be required by law, any information acquired during such employment that may compromise the client, the person who is the subject of the investigation, or the investigation to which the licensee has been assigned;
(3) Knowingly make a material misrepresentation as to his or her ability to perform the investigation required by a potential client in order to obtain employment;
(4) Knowingly make a material misrepresentation to the client regarding the investigation; or
(5) Continue an investigation for a client when it becomes obvious to the licensee that a successful completion of an investigation is unlikely, unless the licensee advises the client and obtains the client's approval for continuation of the investigation.
SECTION 11. A NEW SECTION OF KRS CHAPTER 329A IS CREATED TO READ AS FOLLOWS:
(1) The board may investigate allegations of licensee wrongdoing upon complaint or upon its own volition. The board shall promulgate administrative regulations regarding the receiving and investigating of complaints.
(2) If the board's investigation reveals evidence supporting the complaint, the board shall set the matter for hearing pursuant to the provisions of KRS Chapter 13B before suspending, revoking, imposing probationary or supervisory conditions or an administrative fine, issuing a written reprimand, or any other combination of actions regarding any license under the provisions of Sections 1 to 17 of this Act.
(3) If, after an investigation that includes an opportunity for the licensee to respond, the board determines that a violation took place but was not of a serious nature, it may issue a written admonishment to the licensee. A copy of the admonishment shall be placed in the board's permanent licensure file. The licensee shall have the right to file a response to the admonishment within thirty (30) days of its receipt and to have that response placed in the board's permanent licensure file. The licensee may, within thirty (30) days of receipt, file a request for hearing with the board. Upon receipt of this request the board shall set aside the written admonishment and set the matter for hearing under the provisions of KRS Chapter 13B.
SECTION 12. A NEW SECTION OF KRS CHAPTER 329A IS CREATED TO READ AS FOLLOWS:
(1) The board may refuse to issue a license, or suspend, revoke, impose probationary conditions, impose an administrative fine, issue a written reprimand, or any combination thereof regarding any licensee upon proof that the licensee or applicant has:
(a) Violated any provision of Sections 1 to 17 of this Act or any administrative regulation promulgated by the board;
(b) Knowingly and willfully made a material misstatement in connection with an application for license or renewal;
(c) Been convicted of a felony;
(d) Practiced fraud, deceit, or misrepresentation;
(e) Committed any act that would have been cause for refusal to issue the license had it existed and been known to the board at the time of issuance;
(f) Been incompetent or negligent in the practice of private investigating; or
(g) Violated the code of ethics promulgated by administrative regulation by the board.
(2) In addition to or in lieu of any other lawful disciplinary action under this section, the board may assess a civil penalty not exceeding two thousand dollars ($2,000).
(3) When the board issues a written reprimand to the licensee a copy of the reprimand shall be placed in the permanent file of the licensee. The licensee shall have the right to submit a response within thirty (30) days of its receipt and to have that response filed in the permanent file.
(4) At any time during the investigative or hearing processes, the board may accept an assurance of voluntary compliance from the licensee if the assurance effectively deals with the complaint.
(5) The board may reconsider, modify, or reverse its probation, suspension, or other disciplinary action.
(6) Any party aggrieved by a disciplinary action of the board may bring an action in Franklin Circuit Court pursuant to the provisions of KRS Chapter 13B.
(7) A license shall be subject to expiration and renewal during any period in which the license is suspended.
SECTION 13. A NEW SECTION OF KRS CHAPTER 329A IS CREATED TO READ AS FOLLOWS:
The provisions of Sections 1 to 17 of this Act do not apply to:
(1) An officer or employee of the United States, this state, another state, or any political subdivision thereof, performing his or her official duties within the course and scope of his or her employment;
(2) A public accountant, certified public accountant, or the bona fide employee of either, performing duties within the scope of public accountancy;
(3) A person engaged exclusively in the business of obtaining and furnishing information regarding the financial rating or standing and credit of persons;
(4) An attorney-at-law, or an attorney's bona fide employee, performing duties within the scope of the practice of law;
(5) An insurance company, licensed insurance agent, or staff or independent adjuster if authorized to do business in Kentucky, performing investigative duties limited to matters strictly pertaining to an insurance transaction;
(6) A person engaged in compiling genealogical information, or otherwise tracing lineage or ancestry, by primarily utilizing public records and historical information or databases;
(7) A private business employee conducting investigations relating to the company entity by which he or she is employed;
(8) An individual obtaining information or conducting investigations on his or her own behalf; or
(9) An employee of a private investigator or a private investigating firm who works under the direction of the private investigator or the private investigating firm for less than three hundred fifty (350) hours per year.
SECTION 14. A NEW SECTION OF KRS CHAPTER 329A IS CREATED TO READ AS FOLLOWS:
(1) A licensee shall notify the board in writing within thirty (30) days of:
(a) Any material change in the information previously furnished or required to be furnished to the board;
(b) Any occurrence that could reasonably be expected to affect the licensee's right to a license under Sections 1 to 17 of this Act, including but not limited to any criminal charges placed against the licensee or employees of the licensee;
(c) Any change in insurance coverage required under Section 6 of this Act; and
(d) Any claims, judgments, or settlements against the licensee, the licensee's employees, or the licensee's insurance company.
(2) An investigative company shall notify the board in writing within thirty (30) days of any criminal charges filed against an investigator employed by or affiliated with the company.
SECTION 15. A NEW SECTION OF KRS CHAPTER 329A IS CREATED TO READ AS FOLLOWS:
Any person violating Section 2 of this Act shall be guilty of a Class A misdemeanor.
SECTION 16. A NEW SECTION OF KRS CHAPTER 329A IS CREATED TO READ AS FOLLOWS:
The General Assembly intends, by the provisions of this chapter, to occupy the entire field of regulation and licensing of private investigators. No cities, counties, urban-county governments, charter counties, consolidated local governments, or other political subdivisions of the Commonwealth may adopt or continue in effect any ordinance, resolution, regulation, or rule regarding the regulation of private investigators. Nothing in this section shall be construed to abrogate any authority afforded by this chapter to the Kentucky Board of Licensure of Private Investigators.
SECTION 17. A NEW SECTION OF KRS CHAPTER 329A IS CREATED TO READ AS FOLLOWS:
Sections 1 to 17 of this Act may be cited as the Kentucky Private Investigators Licensing Act.
(1) Any private investigating firm that has had its headquarters in the Commonwealth of Kentucky for at least two (2) years prior to the effective date of this Act shall receive a license automatically upon filing the appropriate application and paying the appropriate fee by April 1, 2003.
(2) Any person actively engaged in full-time or part-time investigatory work in this state as a private investigator or as an investigator for a law enforcement agency for a continuous period of at least two (2) years prior to the effective date of this Act shall receive a license upon:
(a) Filing an application with the board prior to April 1, 2003, including supporting documentation;
(b) Paying the licensure fee; and
(c) Passing the examination administered by the board in accordance with Section 4 of this Act unless the board, in its discretion and on a case by case basis, waives the examination requirement.