Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

F I S C A L I M P A C T R E P O R T

SPONSOR Altamirano

DATE TYPED 2/27/05

HB

SHORT TITLE Bail Bondsman Licensure Requirements

SB 877/aSPAC

ANALYST Hanika-Ortiz

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

None

SOURCES OF INFORMATION

LFC Files

Responses Received From

Public Defender Department (PDD)

Administrative Office of the Courts (AOC)

Office of the Attorney General (AOG)

Public Regulation Commission (PRC)

Bernalillo County Metro Court

SUMMARY

Synopsis of SPAC Amendment

The Senate Public Affairs Committee Amendment clarifies that the emergency clause in the bill

exists because it is necessary for the public peace, health and safety that this Act take effect im-

mediately.

Synopsis of Original Bill

Senate Bill 877 amends portions of the Bail Bondsmen Licensing Law in regards to licensing

qualifications, collateral requirements, and business practices for bail bondmen.

Specifically, the bill:

1.

Prohibits a person with a felony conviction; or a law enforcement, judicial or prosecution

official from becoming licensed as a bail bondsmen.

2.

Restricts additional surcharges bondsmen can add to their allowed fees; provides for the

Senate Bill 877/aSPAC-- Page 2

return of collateral within 15 days of termination of the bond; prohibits retention or sale

of collateral for failure to pay a bond premium; limits collateral interests in real property

to the amount of the bond; prohibits pledging collateral directly to the court; and requires

a receipt describing the collateral.

3.

Requires bondsmen to conduct business only under the name on the license and be re-

sponsible for their own and their employees’ conduct and recovery activities.

4.

Allows the Superintendent of Insurance to terminate a license upon violations of these

provisions, including the failure to preserve and return collateral.

Significant Issues

The PRC has the following comments:

The Insurance Division has received a number of inquiries about the qualifications of pending

applicants, existing licensees and their criminal histories. The Division has serious concerns

about the suitability of individual licensure to transact the bail bond business and their interaction

with the judicial system, consumers and consumer families.

On June 29, 2004, the Superintendent asked staff to review applicable federal and state laws to

determine whether stricter qualifications for bail bondsmen were necessary. Staff prepared the

proposed legislation based in part upon recent changes to Colorado’s laws, when faced with

similar issues.

At present, federal law only permits the Superintendent to deny a license if there is a federal

conviction and the conviction specifically relates to the “transaction of insurance”. This termi-

nology is ambiguous and is crafted more appropriately for insurance agents and brokers whose

business differs from bail bondsmen. Beyond convictions related to the transaction of insurance,

New Mexico’s Criminal Rehabilitation Statute governs other types of convictions pursuant to a

three-year look back period.

Bail bond licensees play an adjunct role in our judicial system. They essentially agree to post

bail or become the “jailor of choice” for an arrested individual to allow the arrestee to be re-

leased from jail on the assurance that they will appear in Court. Bail bondsmen may accept col-

lateral security from the individual or the individual’s family, to ensure appearance in Court. If

an accused flees, the bail bondsmen is liable to the Court for the full amount of the bond and has

the obligation to recover the accused.

Recognizing this role and in the interests of these individual’s families and the judicial system,

bail bond licensees must be held to a certain level of qualifications and background beyond that

of an insurance agent, broker or adjuster. They must be responsible in their dealing with jail per-

sonnel and the Courts in assuring that individuals honor appearances. Likewise, they must not

take advantage of families bailing out loved ones by pledging certain collaterals such as homes,

vehicles and other forms of personal property that must immediately be returned unconditionally

upon termination of the liability of the bond via appearance in Court.

PERFORMANCE IMPLICATIONS

The Bail Bondsmen Licensing Law is compiled as part of the Insurance Code and is adminis-

tered by the Superintendent of Insurance.

Senate Bill 877/aSPAC-- Page 3

FISCAL IMPLICATIONS

The Insurance Division of the PRC do not anticipate any significant fiscal impact.

The AOC reports any additional fiscal impact on the judiciary would be proportional to the en-

forcement of this new law.

There may be greater protection in place in restricting losses for New Mexico citizens who

pledge homes, vehicles and other forms of personal property as collateral when providing bail.

ADMINISTRATIVE IMPLICATIONS

The PRC will be required to notify the insurance industry, licensing staff and third party vendors

of the changes in law through briefings and trainings.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Duplicates HB 835

TECHNICAL ISSUES

The PDD notes SB 877 prevents attorneys from being licensed as bail bondsmen, and may vio-

late constitutional rights to property as there may be no rational basis to prevent an attorney from

operating a bail bonding business.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

There may not be legislation is place to adequately protect people who post bonds through sure-

ties.

AHO/yr:lg