HB0262

HOUSE BILL 262

50th legislature - STATE OF NEW MEXICO - first session, 2011

INTRODUCED BY

William "Bill" R. Rehm

AN ACT

RELATING TO LICENSING; ENACTING THE PROCESS SERVER LICENSING ACT; MAKING AN APPROPRIATION; PROVIDING PENALTIES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 22 of this act may be cited as the "Process Server Licensing Act".

SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Process Server Licensing Act:

A. "client" means an individual or legal entity having a contract that authorizes services to be provided in return for financial or other consideration;

B. "conviction" means any final adjudication of guilty, whether pursuant to a plea of guilty or nolo contendere or otherwise and whether or not the sentence is deferred or suspended;

C. "department" means the regulation and licensing department;

D. "legal business entity" means a sole proprietorship, corporation, partnership, limited liability company, limited liability partnership or other entity formed for business purposes;

E. "licensee" means a person licensed as a process server;

F. "manager" means an individual who:

(1) has the qualifications required of a licensee; and

(2) directs, controls or manages a process server for the owner of a business when the owner does not qualify for a license pursuant to the Process Server Licensing Act;

G. "process server" means a person who personally delivers ir attempts to personally deliver legal or court-related documents to another person;

H. "process server company" means a legal business entity that provides process service services, the location of which may be within or outside of the state, provided that the process service services are performed within New Mexico;

I. "process server employee" means an individual who is registered by the department to work under the direct control and supervision of a process server for a process server company;

J. "process server manager" means an individual who:

(1) is licensed as a process server and is issued a license by the department as a process server manager;

(2) directs, controls or manages a process server company for the owner of the company; and

(3) is assigned to and operates from a process server company that the process server manager is licensed to manage or from a branch office of that process server company;

K. "process service" means the personal delivery of or attempt to personally deliver legal or court-related documents to a person;

L. "registrant" means an individual registered as a process server employee; and

M. "superintendent" means the superintendent of regulation and licensing.

SECTION 3. [NEW MATERIAL] LICENSE REQUIRED.--It is unlawful for an individual to:

A. act as a process server, process server employee or process server manager or to make any representation as being a licensee or registrant unless the individual is licensed or registered by the department pursuant to the Process Server Licensing Act;

B. continue to act as a process server, process server employee or process server manager if the individual's license or registration issued pursuant to the Process Server Licensing Act has expired; or

C. represent falsely that the individual is employed by a licensee.

SECTION 4. [NEW MATERIAL] PERSONS EXEMPTED.--The Process Server Licensing Act does not apply to:

A. an officer or employee of the United States or this state or a political subdivision of the United States or this state while that officer or employee is engaged in the performance of the officer's or employee's official duties; or

B. an individual who engages in process service not more than once in a six-month period and who is not remunerated in any way for process service.

SECTION 5. [NEW MATERIAL] ADMINISTRATION OF ACT--RULES.--

The department shall:

A. enforce and administer the provisions of the Process Server Licensing Act;

B. keep a record of each individual licensee and registrant;

C. adopt and enforce rules necessary to carry out the provisions of the Process Server Licensing Act, including establishing professional ethical standards; and

D. adopt rules regarding:

(1) licensing process servers, process server managers and process server companies;

(2) registering process server employees;

(3) establishing minimum training and educational standards for licensure and registration;

(4) establishing continuing education requirements;

(5) establishing and operating a branch office;

(6) creating a policy on reciprocity with other states and territories of the United States; and

(7) conducting background investigations.

SECTION 6. [NEW MATERIAL] REQUIREMENTS FOR LICENSURE.--

A. The department shall issue a license as a process server to an individual who files a completed application accompanied by the required fees and who submits satisfactory evidence that the applicant has met all requirements set forth by the department in rule, including that the applicant:

(1) is at least twenty-one years of age;

(2) is of good moral character;

(3) has successfully passed an examination as required by department rule;

(4) has not been convicted of a felony offense or an offense involving an intentional violent act or the illegal use or possession of a deadly weapon and has not been found to have violated professional ethical standards;

(5) has at least two years' experience that has been acquired within the five years preceding the filing of the application with the department, consisting of not less than four thousand hours of actual work performed in serving of process and related duties; and

(6) unless covered by the surety bond of a process server company, maintains a surety bond in the amount of ten thousand dollars ($10,000).

B. Years and hours of qualifying experience and the precise nature of that experience shall be substantiated by written certification from employers and shall be subject to independent verification by the department as it deems warranted. The burden of proving necessary experience is on the applicant.

SECTION 7. [NEW MATERIAL] PROCESS SERVER COMPANY--

REQUIREMENTS FOR LICENSURE.--The department shall issue a license for a process server company to a person that files a completed application accompanied by the required fees and that submits satisfactory evidence that the applicant:

A. if an individual, is of good moral character; or if a legal business entity, that the owners, officers or directors of the entity are of good moral character;

B. if an individual, has not been convicted of a felony offense involving an intentional violent act or the illegal use or possession of a deadly weapon and has not been found to have violated professional ethical standards; or if a legal business entity, that the owners, officers or directors of the entity have not been convicted of felony offenses involving intentional violent acts or the illegal use or possession of deadly weapons and have not been found to have violated professional ethical standards;

C. maintains a surety bond in the amount of ten thousand dollars ($10,000);

D. has an owner or a licensed process server manager who is licensed as a process server and who manages the daily operations of the process server company;

E. maintains a physical location in New Mexico where records are maintained and made available for department inspection;

F. maintains a New Mexico registered agent if the applicant is a process server company located outside of New Mexico; and

G. meets all other requirements set forth in the rules of the department.

SECTION 8. [NEW MATERIAL] PROCESS SERVER MANAGER--

REQUIREMENTS FOR LICENSURE--NOTIFICATION OF DEPARTMENT IN EVENT OF TERMINATION OF EMPLOYMENT.--

A. The department shall issue a license for a process server manager to an individual who files a completed application accompanied by the required fees and who submits satisfactory evidence that the applicant:

(1) possesses a current license in good standing as a process server;

(2) has successfully passed an examination required by department rule;

(3) is employed by the process server company that the applicant is being licensed to manage; and

(4) meets other requirements set forth in the rules of the department.

B. A process server manager who ceases to be employed by the process server company that the manager is licensed to manage, before leaving the company, shall surrender the process server manager's license to the owner, officer or director who is required temporarily to take over the management of the process server company. The owner, officer or director who temporarily takes over managing the process server company within thirty days of the termination from employment of the process server manager shall:

(1) notify the department of the termination of the employment of the process server manager;

(2) submit the surrendered license; and

(3) submit an application to the department naming a new process server manager who shall not begin to perform the duties of a process server manager until and unless the department grants the applicant a process server manager's license.

C. Failure to notify the department within thirty days of the process server manager's termination from employment subjects the license of the process server company to suspension or revocation by the department.

D. Reinstatement of the process server company's license may occur only upon the filing of an application for reinstatement and payment of the reinstatement fee.

SECTION 9. [NEW MATERIAL] PROCESS SERVER EMPLOYEE--

REGISTRATION--REQUIREMENTS.--

A. On or after the effective date of this act, every individual who seeks employment or is currently employed as a process server employee shall file an application for registration with the department.

B. The department shall issue a registration for a process server employee to an individual who files a completed application accompanied by the required fees and who submits satisfactory evidence that the applicant:

(1) is at least eighteen years of age;

(2) is of good moral character;

(3) possesses a high school diploma or its equivalent;

(4) has successfully completed an examination as required by department rule;

(5) has not been convicted of a felony involving an intentional violent act or the illegal use or possession of a deadly weapon and has not been found to have violated professional ethical standards;

(6) will be employed by a process server company, under the direct control and supervision of a process server; and

(7) meets other requirements set forth in rules of the department.

C. If the employment of a process server employee who is employed by only one process server company terminates for any reason, the registration of the individual as a process server employee immediately terminates. The process server employee shall turn over the employee's registration to the process server company upon ceasing employment with that company.

D. A process server company shall notify the department within thirty days from the date of termination of employment of a process server employee of the employment termination and return the employee's registration to the department.

SECTION 10. [NEW MATERIAL] FEES.--The department shall establish a schedule of reasonable fees for the following:

A. an application fee, not to exceed one hundred dollars ($100);

B. a license fee, not to exceed five hundred dollars ($500);

C. a registration fee, not to exceed two hundred fifty dollars ($250);

D. a renewal fee, not to exceed five hundred dollars ($500);

E. a reinstatement fee, not to exceed five hundred dollars ($500);

F. a late fee, not to exceed one hundred dollars ($100); and

G. an administrative fee, not to exceed two hundred dollars ($200).

SECTION 11. [NEW MATERIAL] LICENSE AND REGISTRATION RENEWAL.--

A. A license or registration granted pursuant to the provisions of the Process Server Licensing Act shall be renewed by the department annually unless the term of the license is set by the department in rule to be a longer period.

B. A licensee or registrant with an expired license or registration shall not perform an activity for which a license or registration is required pursuant to the Process Server Licensing Act until the license or registration has been renewed or reinstated.

C. The department may require proof of continuing education credits or other proof of competency as a requirement of renewal or reinstatement of a license or registration.

SECTION 12. [NEW MATERIAL] DISPLAY OF LICENSE AND REGISTRATION--NOTIFICATION OF CHANGES.--

A. A license shall at all times be posted in a conspicuous place in the principal place of business in New Mexico of the licensee.

B. A copy of the registration of each registrant employed by a process server company shall be maintained in the main New Mexico office of the company and in the branch office in which the registrant works.

C. A registration card issued by the department shall at all times be in the possession of and located on the person of a registrant.

D. A licensee, including owners, officers or directors of a process server company, or a registrant shall notify the department immediately in writing of a change in the mailing or contact address of the licensee or registrant.

E. Failure to notify the department within thirty days of changes required to be reported pursuant to this section or failure to carry or display a registration as required is grounds for suspension of a license or registration.

SECTION 13. [NEW MATERIAL] GENERAL OPERATIONS PROVISIONS OF COMPANIES--MANAGEMENT--LIABILITY FOR EMPLOYEES' CONDUCT--MAINTENANCE OF RECORDS REQUIRED--REQUIRED AND PERMITTED ACTIVITIES--ALLOWED CATEGORIES OF UNLICENSED EMPLOYEES.--

A. An owner of a process server company providing services in New Mexico shall operate, direct, control and manage that company provided that the owner is licensed as a process server. An owner of a process server company who is not licensed as a process server shall employ a process server as a process server manager and shall turn over the operation, direction, control and management of the process server company to that manager.

B. A process server company shall not conduct business under a fictitious name until the company has obtained the authorization for use of the name from the department. The department shall not authorize the use of a fictitious name that may generate public confusion with the name of a public officer or agency or the name of an existing process server company.

C. A process server company is liable for the conduct of the company's employees, including the conduct of its process server manager.

D. A process server company shall maintain records of the qualifications, performance and training of all of its current and former employees as required by the department. The records are subject to inspection by the department upon reasonable notice to the owner or process server manager.

E. Except as otherwise provided in this section, every employee of a licensed process server company shall be licensed or registered by the department as an employee of the company with which the employee is employed; provided, however, that a licensee or registrant may work for more than one company concurrently.

F. A licensee or registrant shall notify the department in writing within thirty days of each change in the licensee's or registrant's employment by filing an amendment to the licensee's or registrant's application obtained from the department. If a licensee or registrant ceases to be employed by a process server company, the licensee or registrant shall notify the department in writing within thirty days from the date the licensee or registrant ceases employment with that company.

G. A process server company shall notify the department within thirty days of a change in ownership structure or, if a corporation, a change in the membership of the board of directors.

H. Employees of a process server company who are engaged exclusively to perform stenographic, typing, word processing, secretarial, receptionist, accounting, bookkeeping, information technology or other business applications or support functions and who do not perform the work of a process server are not required to be licensed or registered pursuant to the Process Server Licensing Act.

I. An individual who is not licensed or qualified to be employed as a process server manager shall not be employed to perform the duties required of those managers.

SECTION 14. [NEW MATERIAL] BOND REQUIRED.--

A. A process server company shall file with the department a surety bond executed by a surety company authorized to do business in this state.

B. A surety bond executed and filed with the department pursuant to the Process Server Licensing Act shall remain in force until the surety company issuing the bond has terminated future indemnity by notice to the department.

SECTION 15. [NEW MATERIAL] PROHIBITED ACTS.--

A. A licensee or registrant may divulge to a law enforcement officer or district attorney, the attorney general or the attorney general's representatives information the licensee or registrant acquires concerning a criminal offense, but the licensee or registrant shall not divulge to any other person, except as the licensee or registrant is required by law, information acquired by the licensee or registrant except at the direction of the licensee's or registrant's employer or the client for whom the information was obtained.

B. No licensee or registrant shall knowingly make a false report to the licensee's or registrant's employer or the client for whom service was accomplished or attempted.

C. No process server, process server manager or process server employee shall trespass upon private property posted pursuant to Section 30-14-6 NMSA 1978 without the permission of the owner of that property.

D. No written report shall be submitted to a client except by the licensee, process server manager or a person authorized by either of them, and the person submitting the report shall exercise diligence in ascertaining whether the facts and information of the report are true and correct.

E. No process server, process server manager or process server employee shall use a badge in connection with the official activities of the licensee's or employee's employment for a process server company.

F. No licensee or registrant shall use a title or wear a uniform, use an insignia, use an identification card or make a statement with the intent to give an impression that the licensee or registrant is connected in any way with the federal or state government or a political subdivision of either.

G. No licensee or registrant shall appear as an assignee party in a proceeding involving a claim and delivery action to recover or possess property or action for foreclosing a chattel mortgage, mechanic's lien, materialman's lien or any other lien.

SECTION 16. [NEW MATERIAL] DENIAL, SUSPENSION OR REVOCATION OF LICENSE OR REGISTRATION.--In accordance with procedures contained in the Uniform Licensing Act, the department may deny, suspend or revoke a license or registration held or applied for pursuant to the Process Server Licensing Act or reprimand or place on probation a licensee or registrant upon grounds that the licensee, registrant or applicant:

A. made a false statement or gave false information in connection with an application for a license or registration or renewal or reinstatement of a license or registration;

B. violated a provision of the Process Server Licensing Act;

C. violated a rule of the department adopted pursuant to the Process Server Licensing Act;

D. has been convicted of a felony, any crime involving moral turpitude or an intentional violent act or the illegal use or possession of a deadly weapon;

E. has been found to have violated professional ethical standards;

F. impersonated or permitted or aided and abetted an employee of a process server company to impersonate a law enforcement officer or employee of the United States or of a state or political subdivision of either;

G. committed or permitted an employee of a process server company to commit an act while the license or registration of the person licensed or registered pursuant to the Process Server Licensing Act was expired that would be cause for the suspension or revocation of a license or registration or grounds for the denial of an application for a license or registration;

H. willfully failed or refused to render to a client services as agreed between the parties for which compensation has been paid or tendered in accordance with the agreement of the parties;

I. committed assault, battery or kidnapping or used force or violence on a person without justification;

J. knowingly violated or advised, encouraged or assisted the violation of a court order or injunction in the course of business of the licensee or registrant;

K. knowingly issued a worthless or otherwise fraudulent payroll check that is not redeemed within two days of denial of payment by a bank;

L. has been chronically or persistently inebriated or addicted to the illegal use of dangerous or narcotic drugs;

M. has been adjudged mentally incompetent or insane by regularly constituted authorities;

N. while unlicensed, committed or aided and abetted the commission of any act for which a license is required pursuant to the Process Server Licensing Act; or

O. has been found to have violated the requirements of a state or federal labor, tax or employee benefit law or rule.

SECTION 17. [NEW MATERIAL] HEARING--PENALTIES.--

A. A person who is denied a license or registration or who has a license or registration suspended or revoked shall be entitled to a hearing before the department, if within twenty days after the denial, suspension or revocation, a request for a hearing is received by the department. The procedures of the Uniform Licensing Act shall be followed pertaining to the hearing to the extent that they do not conflict with the provisions of the Process Server Licensing Act.

B. In accordance with the provisions of the Uniform Licensing Act, and in addition to other penalties provided by law, the department may impose the following:

(1) for a violation of the Process Server Licensing Act, a civil penalty not to exceed one thousand dollars ($1,000) for each violation; and

(2) against a person who is found by the department to be engaging in a practice regulated by the department without an appropriate license or registration, civil penalties not to exceed one thousand dollars ($1,000).

SECTION 18. [NEW MATERIAL] LICENSE NOT TRANSFERABLE.--

A. A license or registration issued pursuant to the Process Server Licensing Act shall not be transferred or assigned.

B. The department shall adopt by rule procedures for changes in the name or management of a process server company. If the process server company fails to comply with the procedures established by department rule, the process server company shall be considered to be operating without a license.

SECTION 19. [NEW MATERIAL] LOCAL REGULATIONS.--The provisions of the Process Server Licensing Act shall not prevent the local authorities of a city or county by ordinance and within the exercise of the police power of the city or county from imposing local ordinances upon a person licensed or registered pursuant to the Process Server Licensing Act if the ordinances are consistent with that act.

SECTION 20. [NEW MATERIAL] FUND ESTABLISHED.--

A. The "process server fund" is created in the state treasury.

B. All license and registration fees received by the department pursuant to the Process Server Licensing Act shall be deposited in the fund and are appropriated to the department to be used for the administration and implementation of that act.

C. The state treasurer shall invest the fund as other state funds are invested, and all income derived from investment of the fund shall be credited to the fund.

D. All balances in the fund shall remain in the fund and shall not revert to the general fund.

E. The department shall administer the fund, and money in the fund shall be expended by warrant issued by the secretary of finance and administration on vouchers signed by the superintendent.

F. No more than five percent of the fund shall be used by the department for administration of the fund.

SECTION 21. [NEW MATERIAL] PENALTIES.--

A. A person who engages in a business regulated by the Process Server Licensing Act who fraudulently makes a representation as being a licensee or registrant is guilty of a misdemeanor and, if convicted, shall be sentenced pursuant to Section 31-19-1 NMSA 1978.

B. An individual who fraudulently represents that the individual is employed by a licensee is guilty of a petty misdemeanor and, if convicted, shall be sentenced pursuant to Section 31-19-1 NMSA 1978.

C. A person who violates a mandatory requirement, as set forth by the department in rule, of the Process Server Licensing Act is guilty of a petty misdemeanor except as provided in Subsection A of this section and if convicted shall be sentenced pursuant to Section 31-19-1 NMSA 1978.

SECTION 22. [NEW MATERIAL] BACKGROUND INVESTIGATIONS.--

A. The department shall adopt rules that:

(1) are developed in conjunction with the department of public safety that require background investigations of all persons licensed or registered pursuant to the Process Server Licensing Act to determine if the person has a criminal history;

(2) require all applicants for licensure or registration to be fingerprinted on two fingerprint cards or electronically as required for submission to the federal bureau of investigation to conduct a national criminal history investigation and for submission to the department of public safety to conduct a state criminal history investigation;

(3) provide for an applicant to inspect or challenge the validity of the record developed by the background investigation if the applicant is denied a license or registration; and

(4) establish a fee for fingerprinting and conducting a background investigation of an applicant.

B. Arrest record information received from the federal bureau of investigation and the department of public safety shall be privileged and shall not be disclosed to individuals not directly involved in the decision affecting the specific applicant or employee.

C. The applicant shall pay the cost of obtaining criminal history information from the federal bureau of investigation and the department of public safety.

D. Electronic live scans may be used for conducting criminal history investigations.

SECTION 23. Section 61-27B-4 NMSA 1978 (being Laws 1993, Chapter 212, Section 4, as amended) is amended to read:

"61-27B-4. PERSONS EXEMPTED.--

A. As used in this section, "temporary" means a period of time not to exceed the duration of one private event or one school or nonprofit organization event, as described in Paragraphs (2) and (3) of Subsection B of this section.

B. The Private Investigations Act does not apply to:

(1) an individual employed exclusively and regularly by one employer in connection with the affairs of that employer, provided that the individual patrols or provides security only on the premises of the employer as limited by the employer;

(2) an individual employed exclusively to provide temporary security at a private event that is not open to the public;

(3) individuals providing temporary security at athletic or other youth events and where the events occur under the auspices of a public or private school or a nonprofit organization;

(4) an attorney licensed in New Mexico conducting private investigations while engaged in the practice of law;

(5) an officer or employee of the United States or this state or a political subdivision of the United States or this state while that officer or employee is engaged in the performance of the officer's or employee's official duties;

(6) a person engaged exclusively in the business of obtaining and furnishing information concerning the financial rating of persons;

(7) 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;

(8) a licensed collection agency or an employee of the agency while acting within the scope of employment while making an investigation incidental to the business of the agency, including an investigation of the location of a debtor or the debtor's property;

(9) admitted insurers, adjusters, agents and insurance brokers licensed by the state performing duties in connection with insurance transactions by them; [or]

(10) an institution subject to the jurisdiction of the director of the financial institutions division of the department or the comptroller of currency of the United States; or

(11) an individual who investigated the location of a person for the purpose of process service and who is licensed pursuant to the Process Server Licensing Act."

SECTION 24. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2011.

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