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Friday, April 3, 2009

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.

6 comments:

  1. I agree completely with the intent behind this post. HB628 needs a major overhaul before it goes any further in the legislative process.

    First, I must make it clear that I, too, support whole-heartedly the repeal of the Lee Clause. The reasons necessitating this are abundantly clear, and don't bear repeating.

    Next, the references made to the points highlighted in the post are correct in the assessment that the language of the measure is vague and ambiguous, and if passed as written, would certainly result in unwanted consequences.

    I refer most specifically to the last highlighted point, which states “(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.”

    Regardless of the intent, this will most certainly be interpreted as a requirement for all generals to execute the proposed $5,000 assignment for ALL agents licensed before 08-28-2009, as well as those licensed after the effective date of the law. This would bear a catastrophic fiscal result for smaller agencies, and most certainly force many of them out of business.

    Given the already horrific rate of unemployment, not only in Missouri but across the nation as a whole, I would think the bill's authors and sponsors would be inspired to carefully rethink this part of the measure before proceeding any further.

    The measure should be reworded to read “(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 AFTER August 28, 2009".

    This may possibly curb the growth rate of the number of service providers in the industry, which seemingly continues to increase beyond the calls for services rendered, thus moving to restore the balance of "supply and demand", so to speak, to a state that's more favorable to the overall economy of the industry, without the obvious detriment to the existing businesses.

    Just thinkin' out loud...

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  2. Pled Guilty got S.I.S NOT A CONVICTION4/04/2009 10:37 AM

    Does everyone think it's fair to leave in the "pled guilty to" phrase instead of the PRE-LEE CLAUS, convicted of a felony? Lee was a CONVICTED FELON!!!!!!! And NEVER should have had a BB License. Now, I have had a BB license for over 15 years but I pled guilty to a felony and received an S.I.S. back in 1990. It was a BS perjury charge that instead of fighting it in court and spending thousands of dollars, I took the S.I.S. Knowing that after the probation period the case would be CLOSED. Now you want to put everyone who "pled guilty to" a felony with COVICTED of a felony. That is just plain WRONG and NOT FAIR!!! Change the LEE CLAUS but put back the wording that has been the law since 1983. NO CONVICTED FELONS belong in the industry. So, just put things back the way they were..........NO FELONY CONVICIONS! GET RID OF "PLED GUILTY TO" and change to CONVICTED OF a Felony. This would be fair.

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  3. Even if the statute were changed to allow individuals who pleaded guilty to a felony, but were given an SIS (thus, no conviction), to be licensed as bail bond agents, Supreme Court Rule 33.17 STILL prohibits those individuals who pleaded guilty to a felony from being accepted as a surety and the DIFP likely won’t license such individuals.

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  4. Change the LEE CLAUS but put back the wording that has been the law since 1983. NO CONVICTED FELONS belong in the industry. So, just put things back the way they were..........NO FELONY CONVICIONS! GET RID OF "PLED GUILTY TO" and change to CONVICTED OF a Felony. This would be fair.

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  5. IF YOU CHOOSE !!!Change the LEE CLAUS but put back the wording that has been the law since 1983

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  6. I want to know how come there are Bonding Agents out there letting their BONDEE'S WORK OFF there fee commitment? Is this not against the LAW? Also is it against the law for Bonding Company /Agents to obtain Property over the amount of what the client/Bondee owes the bonding company ???? Example like 150k home debt free for the payment of 15-20 thousand bond liability. With no return investment to Bondee or whom ever co signed or put property up for security .

    ReplyDelete

Although Missouri Bondsman encourages debate on topics of interest to the bail industry, please be aware that comments are moderated. Please observe the posting rules. No comments will be printed that contain spam, profanity, or libelous comments. Please post comments in a civil, professional manner.

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