Bail Bond Language Now in HB777

The Insurance Policy Committee, chaired by Rep. Brian Yates, recently added the bail bond language contained in HB628 to an insurance bill, HB777. The bill was reported out of committee yesterday. After a bill is reported out of the committee, it makes its way to a full vote of the chamber. The bail language in the bill seeks to:

Raise the CD requirement to $50,000 for any new general agent who becomes licensed after 8/28/2009, and additionally requires that “the general bail bond agent shall execute an assignment to the state of Missouri in the amount of five thousand dollars for each bail bond agent licensed under the authority of the general bail bond agent on or after August 28, 2009." The bill also seeks to repeal the Lee Clause, which would delete the 15-year look-back on felony convictions.

The following is my opinion of the bail bond language contained in HB777, formerly known as HB628. I respect Bail Bond Agent Cooper for his tenacity in writing a bill and stepping up to offer a solution. With that said, here is what I think about the specific language:

I support the section of the bill which offers the repeal of the Lee Clause. I think it is reprehensible that a man like Lee Jackson, who served 20 years for 8 felony convictions, was eligible to get a bail bond license.

I do not understand the language in Cooper’s bill in which he amends the current language to say: "(A) bail bond agent shall hold the license for at least four years prior to owning or being an officer of a licensed general bail bond agent.” Does this mean that after possessing a bail bond agent’s for 4 years there is a provision in which you can “own” a general agent? How does one do that? I had hoped the language would have been clarified to say that one must possess an agent’s license for 4 years before becoming eligible to apply for a general agent’s license or becoming eligible to be a corporate officer of a licensed bail bond corporation.

New general agents licensed after August 28, 2009, must possess liquid assets of fifty thousand dollars, along with an executed assignment of fifty thousand dollars to the state of Missouri. The bill does not define what is considered “liquid assets of $50,000”and does not specify who determines the sufficiency of the liquid assets. The bill states that in addition to the “liquid assets,” one must execute an additional assignment of $50,000. Financial experts classify liquid assets as cash or any asset that can be converted into cash within a period of twenty days with little or no loss in value. Money in bank accounts, money market funds, and US Treasury bills are examples of liquid assets. Stocks, bonds, mutual funds, and real estate are not generally considered “liquid.” The fine print could certainly be interpreted to mean a general agent must possess $100,000 in cash-type assets in addition to any fixed assets the general agent may pledge to the local court.

The $5,000 per agent provision seems ambiguous to me. The provision says: “(T)he general bail bond agent shall execute an assignment to the state of Missouri in the amount of five thousand dollars for each bail bond agent licensed under the authority of the general bail bond agent on or after August 28, 2009.” Although I have been told that the intent of this provision is that any general agent, who signs a new agent after August 28th, will have to deposit $5,000, the provision could be interpreted to mean that all general agents in the state could be required to deposit $5,000 for each agent licensed on the date the bill becomes law.

Without careful crafting of new law, vague language can lead to unintended consequences. I hope those responsible for spearheading this bill will recognize that results are what you expect, and consequences are what you get.