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HB-5274, As Passed Senate, May 8, 2008

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 5274

A bill to amend 1965 PA 285, entitled

"Private detective license act,"

by amending the title and sections 1, 2, 3, 4, 5, 6, 7, 8, 10, 14,

16, 17, 19, 20, 22, 24, 27, and 29 (MCL 338.821, 338.822, 338.823,

338.824, 338.825, 338.826, 338.827, 338.828, 338.830, 338.834,

338.836, 338.837, 338.839, 338.840, 338.842, 338.844, 338.847, and

338.849), the title and sections 1, 2, 3, 4, 5, 6, 7, 10, 14, 16,

17, 20, 22, 24, and 27 as amended by 2002 PA 474.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

TITLE

An act to license and regulate ~~private detectives and~~

professional investigators; to provide for certain powers and

duties for certain state agencies and local officials; to provide

for the imposition for certain fees; to protect the general public

against unauthorized, unlicensed and unethical operations by

~~private detectives and private~~ professional investigators; to

provide for immunity for certain persons under certain

circumstances; to provide for penalties and remedies; and to repeal

acts and parts of acts.

Sec. 1. This act shall be known and may be cited as the

~~"private detective license~~ "professional investigator licensure

act".

Sec. 2. As used in this act:

(a) "Certified public accountant" means a person licensed as a

certified public accountant under article 7 of the occupational

code, 1980 PA 299, MCL 339.720 to 339.736.

(b) "Computer forensics" means the collection, investigation,

analysis, and scientific examination of data held on, or retrieved

from, computers, computer networks, computer storage media,

electronic devices, electronic storage media, or electronic

networks, or any combination thereof.

~~and industry services~~ labor and economic growth.

~~(b) "Private detective" or "private investigator" means a~~

~~person, other than an insurance adjuster who is on salary and~~

~~employed by an insurance company or other than a professional~~

~~engineer, who, for a fee, reward, or other consideration, engages~~

~~in business or accepts employment to furnish, or subcontracts or~~

~~agrees to make, or makes an investigation for the purpose of~~

~~obtaining information with reference to any of the following:~~

(i~~) Crimes or wrongs done or threatened against the United~~

~~States or a state or territory of the~~ ~~United States~~.

(ii~~) The identity, habits, conduct, business, occupation,~~

~~honesty, integrity, credibility, trustworthiness, efficiency,~~

~~loyalty, activity, movement, whereabouts, affiliations,~~

~~associations, transactions, acts, reputation, or character of a~~

~~person.~~

(~~iii~~~~) The location, disposition, or recovery of lost or stolen~~

~~property.~~

(iv~~) The cause or responsibility for fires, libels, losses,~~

~~accidents, or damage or injury to persons or property.~~

(v~~) Securing evidence to be used before a court, board,~~

~~officer, or investigating committee.~~

(d) ~~(c)~~ "Insurance adjuster" means a person other than a

~~private detective or private~~ professional investigator who, for a

consideration, engages in the activities described in subdivision

~~(b)~~ (e) in the course of adjusting or otherwise participating in

the disposal of claims under or in connection with a policy of

insurance. Insurance adjuster includes a any of the following:

(i) A person who is employed on a salary basis by an insurance

company. ~~; a~~

(ii) A person, firm, partnership, company, limited liability

company, or corporation who acts for insurance companies solely in

the capacity of a an independent claim adjuster ~~, a~~ while

performing within that capacity.

(iii) A person, firm, partnership, company, limited liability

company, or corporation engaged in the business of public adjuster

acting for claimants in securing adjustments of claims against

insurance companies and who does not perform investigative services

including, but not limited to, surveillance activities.

(e) "Investigation business" means a business that, for a fee,

reward, or other consideration, engages in business or accepts

employment to furnish, or subcontracts or agrees to make, or makes

an investigation for the purpose of obtaining information with

reference to any of the following:

(i) Crimes or wrongs done or threatened against the United

States or a state or territory of the United States, or any other

person or legal entity.

(ii) The identity, habits, conduct, business, occupation,

honesty, integrity, credibility, trustworthiness, efficiency,

loyalty, activity, movement, whereabouts, affiliations,

associations, transactions, acts, reputation, or character of a

person.

(iii) The location, disposition, or recovery of lost or stolen

property.

(iv) The cause or responsibility for fires, libels, losses,

accidents, or damage or injury to persons or property.

(v) Securing evidence to be used before a court, board,

officer, or investigating committee.

(vi) The prevention, detection, and removal of surreptitiously

installed devices designed for eavesdropping or observation, or

both.

(vii) The electronic tracking of the location of an individual

or motor vehicle for purposes of detection or investigation.

(viii) Computer forensics to be used as evidence before a court,

board, officer, or investigating committee.

(f) ~~(d)~~ "Licensee" means a person licensed under this act.

(g) ~~(e)~~ "Professional engineer" means a person licensed under

article 20 of the occupational code, 1980 PA 299, MCL 339.2001 to

339.2014, as a professional engineer.

(h) "Professional investigator" means a person, other than an

insurance adjuster who is on salary and employed by an insurance

company, who for a fee, reward, or other consideration engages in

the investigation business.

Sec. 3. (1) A person, firm, partnership, company, limited

liability company, or corporation shall not engage in the business

of ~~private detective or~~ professional investigator for hire, fee, or

reward, and shall not advertise his or her business to be that of

~~detective~~ professional investigator or of a ~~detective~~ professional

investigator agency without first obtaining a license from the

department. ~~(2)~~ A person, firm, partnership, company, limited

liability company, or corporation shall not engage in the business

of furnishing or supplying, for hire and reward, information as to

the personal character of any person or firm, or as to the

character or kind of business and occupation of any person, firm,

partnership, company, limited liability company, or corporation and

shall not own, conduct, or maintain a bureau or agency for the

purposes described in this subsection except as to the financial

rating of persons, firms, partnerships, companies, limited

liability companies, or corporations without having first obtained

a license as a professional investigator from the department.

(2) The department, the attorney general, the Michigan state

police, or a local law enforcement agency, on its own initiative or

at the request of any other person or legal entity, may investigate

allegations of a person or legal entity engaging in activities

regulated under this act without being appropriately licensed or

exempt from licensure under this act. The entity conducting the

investigation shall report its findings to the attorney general and

county prosecuting attorney having jurisdiction in the location

within which the alleged violator is engaged in business. The

attorney general or county prosecuting attorney may bring an

appropriate civil or criminal action in a court of competent

jurisdiction to enjoin any person or legal entity that has engaged

or is about to engage in any activity regulated by this act without

being appropriately licensed or exempt from licensure under this

act. Such an injunction may be issued without proof of actual

damage sustained by any person or legal entity. Issuance of an

injunction shall not prevent criminal prosecution of a violator. In

addition to issuing the injunction, the court may impose a civil

violation fine not to exceed $25,000.00. A person or other legal

entity who reports to the department, a local law enforcement

agency, a county prosecuting attorney, or the attorney general

regarding an allegation of unlicensed activity is immune from tort

liability for making the report.

(3) A person violating this section is guilty of a felony

punishable by imprisonment for not more than 4 years or by a penal

fine of not more than $5,000.00, or both.

Sec. 4. This act does not apply to any of the following:

(a) A person employed exclusively and regularly by an employer

in connection with the affairs of the employer only and there

exists a bona fide employer-employee relationship for which the

employee is reimbursed on a salary basis.

(b) An officer or employee of the United States, this state,

or a political subdivision of this state while that officer or

employee is engaged in the performance of his or her official

duties except that such officer or employee does not include a

professional investigator hired or employed under contract by the

United States, this state, or a political subdivision of this

state.

the financial standing, rating, and credit responsibility of

persons or as to the personal habits and financial responsibility

of applicants for insurance, indemnity bonds, or commercial credit.

(d) A charitable philanthropic society or association duly

incorporated under the laws of this state that is organized and

maintained for the public good and not for private profit.

(e) An attorney ~~at law~~ admitted to practice in this state in

performing his or her duties as ~~such~~ an attorney at law.

(f) A collection agency or finance company licensed to do

business under the laws of this state or any employee of a

collection agency or finance company while acting within the scope

of his or her employment when making an investigation incidental to

the business of the agency, including an investigation of the

location of the debtor or his or her assets and property in which

the client has an interest or upon which the client has a lien.

(g) An insurance adjuster who is employed on a salary basis by

an insurance company or a person, firm, partnership, company,

limited liability company, or corporation that acts for an

insurance company solely in the capacity of claim adjuster. A

person, firm, partnership, company, limited liability company, or

corporation engaged in the business of public adjuster acting for

claimants in securing adjustments of claims against insurance

companies and who does not perform investigative services

including, but not limited to, surveillance activities.

(h) A professional engineer acting within the scope of his or

her licensed professional practice who does not perform

investigative services, including, but not limited to, surveillance

activities or other activities outside of the scope of his or her

licensed professional practice.

(i) A certified public accountant acting within the scope of

his or her licensed professional practice who does not perform

investigative services, including, but not limited to, surveillance

activities or other activities outside of the scope of his or her

licensed professional practice.

(j) A bail agent authorized under section 167b of the Michigan

penal code, 1931 PA 328, MCL 750.167b, while performing his or her

duties as a bail agent.

Sec. 5. (1) The department, upon application and after making

a determination that the applicant is qualified, shall issue the

applicant a license to conduct business as a ~~private detective or~~

~~private~~ professional investigator for a period of 3 years from date

of issuance.

(2) Upon the issuance of a license under this act to conduct

business as a ~~private detective or private~~ professional

investigator, the applicant is not required to obtain any other

license from any municipality or political subdivision of this

state.

Sec. 6. (1) The department shall issue a license to conduct

business as a ~~private detective or private~~ professional

investigator if satisfied that the applicant is a person, or if a

firm, partnership, company, limited liability company, or

corporation, the sole or principal license holder is a person who

meets all of the following qualifications:

(a) Is a citizen of the United States.

(b) Is not less than 25 years of age.

(d) Has not been convicted of a felony, or a misdemeanor

involving any of the following:

(i) Dishonesty or fraud.

(ii) Unauthorized divulging or selling of information or

evidence.

(iii) Impersonation of a law enforcement officer or employee of

the United States or a state, or a political subdivision of the

United States or a state.

(iv) Illegally using, carrying, or possessing a dangerous

weapon.

(v) Two or more alcohol related offenses.

(vi) Controlled substances under the public health code, 1978

PA 368, MCL 333.1101 to 333.25211.

(vii) An assault.

(e) Has not been dishonorably discharged from a branch of the

United States military service.

(f) For a period of not less than 3 years has been or is any

of the following on a full-time basis:

(i) Lawfully engaged in the ~~private detective business on his~~

~~or her own account~~ professional investigation business as a

licensee, registrant, or investigative employee in another state.

(ii) Lawfully engaged in the ~~private detective~~ investigation

business as an investigative employee of the holder of a

~~certificate of authority~~ license to conduct a ~~detective~~

professional investigation agency.

(iii) An investigator, detective, special agent, intelligence

specialist, parole agent, probation officer, or certified police

officer ~~of a city, county, or state government or of the United~~

~~States government~~ employed by any government executive, military,

judicial, or legislative agency, or other public authority engaged

in investigative or intelligence activities. This subdivision does

not include individuals employed by educational or charitable

institutions who are solely engaged in academic, consulting,

educational, instructional, or research activities. In the case of

the experience requirement under this subparagraph for an applicant

demonstrating experience as a probation officer or parole agent,

the department shall consider any application filed on or after

January 1, 2005 for eligibility regarding that experience.

(iv) A graduate of an accredited institution of higher

education with a baccalaureate or postgraduate degree in the field

of police administration, security management, investigation, law,

or criminal justice, or computer forensics or other computer

forensic industry certificated study that is acceptable to the

department. ~~from an accredited university or college acceptable to~~

~~the department.~~

(v) Lawfully engaged in the investigation business as a full-

time proprietary or in-house investigator employed by a business or

attorney, or as an investigative reporter employed by a recognized

media outlet, acceptable to the department. This subdivision does

not include individuals employed by educational or charitable

institutions who are solely engaged in academic, consulting,

educational, instructional, or research activities.

(g) Has posted with the department a bond or insurance policy

provided for in this act.

(2) In the case of a person, firm, partnership, company,

limited liability company, or corporation now doing or seeking to

do business in this state, the ~~resident~~ manager shall comply with

the qualifications of this section.

(3) ~~A person regulated as a private detective or private~~

~~investigator in another state having a reciprocal agreement with~~

~~this state may engage in activities regulated by this act without~~

~~being licensed for the limited purpose and for a limited amount of~~

~~time as necessary to continue an ongoing investigation originating~~

~~in that state.~~ Beginning July 1, 2010, a law enforcement officer,

as that term is defined in section 2 of the commission of law

enforcement standards act, 1965 PA 203, MCL 28.602, shall not be

issued a new or renewal license and shall not be employed and

working in an investigative capacity by, or authorized to operate

in a capacity as, a professional investigator unless the law

enforcement officer obtains and produces, in a manner acceptable to

the department, any 1 of the following:

(a) Written permission to act as a professional investigator

from the current chief of police, county sheriff, or other official

having executive authority and responsibility over the law

enforcement matters in that jurisdiction if the law enforcement

officer does not work under the authority of a chief of police or

county sheriff.

(b) A copy of the law enforcement officer's jurisdiction's

published policies and procedures allowing off-duty employment,

which policies and procedures include the prohibition of the off-

duty use of investigative tools or equipment, or both, provided

exclusively for law enforcement and indicate that the off-duty

employment as a professional investigator is not considered in

conflict with employment as a law enforcement officer.

enforcement officer's jurisdiction.

(4) This act does not prevent a licensee from acting as a

~~private detective or private~~ professional investigator outside of

this state to the extent allowed by that other state under the laws

of that state.

(5) The department may enter into reciprocal agreements with

other states that have professional investigator qualification laws

to allow a professional investigator license or registration to be

used by that licensee or registrant within the jurisdiction of

either this state or another state. The reciprocal agreement shall

be limited to only allow professional investigators to continue

investigations that originate in the investigator's home state and

that require investigation in another state. The department may

enter into a reciprocal agreement if the other state meets all of

the following conditions:

(a) Issues a professional investigator identification card

with an expiration date printed on the card.

(b) Is available to verify the license or registration status

for law enforcement purposes.

for licenses and registrations.

(d) Requires the applicant for a license or registration as a

professional investigator to submit to a criminal history records

check pursuant to applicable state and federal law.

(6) Each reciprocal agreement shall, at a minimum, include the

following provisions:

(a) A requirement that the professional investigator possess a

professional investigator license or registration in good standing

from his or her home state.

(b) A requirement that the professional investigator shall be

time-limited to a maximum of 30 days per case while conducting an

investigation in this state, or a lesser amount of time if required

to comply with the reciprocity statutes or regulations of the other

state.

other state not solicit any business in this state while conducting

investigations in this state.

Sec. 7. (1) The department shall prepare a standard uniform

application. The applicant shall obtain notarized reference

statements from at least 5 reputable citizens who swear that they

have known the applicant and his or her qualifications for a period

of at least 5 years and believe that the applicant is honest, of

good character, and competent. The individual providing the

reference shall not be related or connected to the person so

certifying by blood or marriage.

(2) Upon receipt of the application, application processing

fee, and license fee as described in section 9, the department

shall investigate as to the applicant's qualifications for

licensure.

~~(3) The application and investigation are not considered~~

~~complete until the applicant has received the approval of the~~

~~prosecuting attorney and the sheriff of the county within which the~~

~~principal office of the applicant is to be located. If the office~~

~~is to be located in a city, township, or village, the approval of~~

~~the chief of police may be obtained instead of the sheriff.~~

Sec. 8. If the applicant is a corporation, the application

shall be signed and verified by the president, secretary and

treasurer thereof, and shall specify the name of the corporation,

the date and place of its incorporation, the location of its

principal place of business, and the name of the city, town or

village, stating the street and number, and such other description

as will indicate the location of the bureau, agency, subagency,

office or branch office for which the license is desired, ~~the~~

~~amount of the corporation's outstanding paid up capital and stock,~~

~~and whether paid in cash or property, and if in property, the~~

~~nature of the same,~~ and shall be accompanied by a duly certified

copy of a certificate of incorporation.

Sec. 10. (1) The department may suspend or revoke a license

issued under this act if the department determines that the

licensee or licensee's manager, if an individual, or if the

licensee is a person other than an individual, that an officer,

director, partner, or its manager, has done any of the following:

(a) Made false statements or given false information in

connection with an application for a license or a renewal or

reinstatement of a license.

(b) Violated this act or any rule promulgated under this act.

dishonesty or fraud, unauthorized divulging or selling of

information or evidence.

(d) Been convicted of impersonation of a law enforcement

officer or employee of the United States or a state, or a political

subdivision of the United States or a state.

(e) Been convicted of illegally using, carrying, or possessing

a dangerous weapon.

(f) In the case of a law enforcement officer issued a license

under the conditions contained in section 6(3), violated the

policies and procedures governing off-duty employment.

(2) In addition to the suspension or revocation provisions

available to the department under subsection (1), the department

may do 1 or more of the following regarding a licensee or a

licensee's manager, if an individual, or if the licensee is a

person other than an individual, an officer, director, partner,

member, or its manager, who violates this act or a rule or order

promulgated or issued under this act:

(a) Place a limitation on a license.

(b) Deny a renewal of a license.

(d) Issue an order of probation.

(e) Impose a requirement that restitution be made.

(3) ~~(2)~~ Upon notification from the department of the

suspension or revocation of the license, the licensee, within 24

hours, shall surrender to the department the license and his or her

identification card. Failure to surrender the license in compliance

with this subsection is a misdemeanor.

Sec. 14. (1) Upon issuing a license, the department shall also

issue an identification card to the principal license holder or, if

the agency is a partnership, to each partner or, if the license

holder is a corporation or limited liability company, to each

resident officer, manager, or member.

(2) The identification card issued under subsection (1) shall

be in such form and contain such information as may be prescribed

by the department and is recallable by the department for the same

reasons as the license.

(3) The department shall only issue 1 identification card for

each person entitled to receive it. The licensee is responsible for

the maintenance, custody, and control of the identification card

and shall not lease, loan, sell, or otherwise permit unauthorized

persons or employees to use it. This subsection ~~shall~~ does not be

~~construed to~~ prevent each agency from issuing its own

identification cards, if approved as to form and content by the

department, to ~~their~~ its respective employees. The individual

identification card shall not bear the seal of the state or the

designation of ~~private detective or private~~ professional

investigator, but the identification card may designate the

employee as an investigator or operator and may state that the

person is employed by a licensee of the department and the state of

Michigan.

(4) Upon proper application and for sufficient reasons shown,

the department may issue duplicates of the original license or

identification card.

Sec. 16. (1) A person shall not possess or display a badge or

shield that purports to indicate that the holder is a private

detective, private investigator, or professional investigator.

(2) A licensee may request authorization to provide employee

identification cards only upon the express authorization of the

department as to format and content.

(3) A person shall not display any badge, shield,

identification card, or license that might mislead the public into

thinking that the holder is a licensed ~~detective~~ professional

investigator.

(4) A person who violates this section is guilty of a

misdemeanor and any unauthorized badge, shield, identification

card, or license shall be confiscated by any law enforcement

officer of the state. Each day the violation continues shall

constitute a separate offense.

Sec. 17. (1) A licensee may employ as many persons as

considered necessary to assist in his or her work of ~~detective~~

professional investigator and in the conduct of the business. At

all times during the employment, the licensee shall be have direct

involvement in the day-to-day activities and is accountable for the

good conduct in the business of each person so employed.

(2) A licensee shall keep adequate and complete records of all

persons he or she employs, which records shall be made available to

the department upon request and to police authorities if the police

authorities offer legitimate proof for the request in connection

with a specific need.

(3) If a licensee falsely states or represents that a person

is or has been in his or her employ, the false statement or

representation shall be sufficient cause for the suspension or

revocation of the license. Any person falsely stating or

representing that he or she is or has been a ~~detective~~ professional

investigator or employed by a ~~detective~~ professional investigator

agency is guilty of a misdemeanor.

(4) A licensee shall not knowingly employ any person who does

not meet the requirements of this act.

(5) The licensee shall cause fingerprints to be taken of all

prospective employees, which fingerprints shall be submitted to the

department and the federal bureau of investigation for processing

and approval.

(6) The fingerprints required to be taken under subsection (5)

may be taken by a law enforcement agency or any other person

determined by the department to be qualified to take fingerprints.

The licensee shall submit a fingerprint processing fee to the

department in accordance with section 3 of 1935 PA 120, MCL 28.273,

as well as any costs imposed by the federal bureau of

investigation.

Sec. 19. Any person licensed as a ~~private detective~~

professional investigator, or in the employ of a ~~private detective~~

professional investigator agency, is not authorized to carry a

deadly weapon unless he is so licensed in accordance with the

present laws of this state.

Sec. 20. (1) Any person who is or has been an employee of a

licensee shall not divulge to anyone other than his or her employer

or former employer, or as the employer shall direct, except as he

or she may be required by law, any information acquired by him or

her during his or her employment in respect to any of the work to

which he or she shall have been assigned by the employer. Any

employee violating the provisions of this section and any employee

who willfully makes a false report to his or her employer in

respect to any work is guilty of a misdemeanor.

(2) Any principal, manager, or employee of a licensee who

willfully furnishes false information to clients, or who willfully

sells, divulges, or otherwise discloses to other than clients,

except as may be required by law, any information acquired during

employment by the client is guilty of a misdemeanor and is subject

to summary suspension of license and revocation of license upon

satisfactory proof of the offense to the department. Any

communications, oral or written, furnished by a professional or

client to a licensee, or any information secured in connection with

an assignment for a client, is considered privileged with the same

authority and dignity as are other privileged communications

recognized by the courts of this state.

(3) Suspension, revocation, denial, or other action against a

licensee or applicant for a license as described in section 10

shall be accompanied by notice and an opportunity for a hearing

under the administrative procedures act of 1969, 1969 PA 306, MCL

24.201 to 24.328.

Sec. 22. (1) An advertisement by a licensee soliciting or

advertising for business shall contain his or her name and address

as they appear in the records of the department.

(2) A licensee shall, on notice from the department,

discontinue any advertising or the use of any advertisement, seal,

or card, that the department determines to be misleading to the

public. Failure to comply with such an order is cause for

suspension or revocation of the license.

(3) Unless licensed under this act, a person shall not

advertise his or her business to be that of a ~~private detective~~

professional investigator regardless of the name or title actually

used.

Sec. 24. (1) Each person, partnership, firm, company, limited

liability company, or corporation licensed and operating under this

act shall make a complete written record of the business

transactions and reports made in connection with the operation of

the agency.

(2) A ~~detective or detective~~ professional investigator agency

that receives or generates a written or electronic report shall

keep the report on file in the office of the ~~detective or agency~~

professional investigator for at least 2 years unless the file is

returned to the client or agent.

Sec. 27. (1) Upon the death of a licensee, the business of the

decedent may be carried on for a period of 90 days by any of the

following:

(a) In the case of an individual licensee, the surviving

spouse, or if there is none, the personal representative of the

estate of the decedent.

(b) In the case of a partner, the surviving partners.

limited liability company, or corporation, the officers.

(2) Within 10 days following the death of a licensee, the

department shall be notified by a person described in subsection

(1) in writing. The notification shall state the name of the person

legally authorized to carry on the business of the deceased.

(3) Upon the authorization of the department, the business may

be carried on for a further period of time when necessary to

complete any investigation or assist in any litigation pending at

the death of the decedent.

(4) This section does not authorize the solicitation or

acceptance of any business after the death of the decedent except

as otherwise provided by this act.

(5) This section shall not be construed to restrict the sale

of a ~~private detective~~ professional investigator business if the

vendee qualifies for a license under the provisions of this act.

Sec. 29. The requirements of this act as to license

applications shall apply to all ~~private detectives~~ professional

investigators, except ~~private detectives~~ those who already have

been granted a license under prior laws of this state. The

requirements as to renewal of license certificates shall apply to

all ~~private detectives~~ professional investigators licensed under

this act or any prior law of this state.