This bill (as amended by the House Judiciary Committee, April 8, 1999) strikes the bill as introduced and allows bail bonding agents who have completed specified prelicensure educational requirements and have been licensed for four years as a bail bonding agent, to apply for licensure as a professional cash bail agent. The bill requires each professional cash bail agent to post a qualification bond in an amount of no less than $50,000 with the Division of Insurance, Department of Regulatory Agencies. The bill prohibits a professional cash bail bond agent from furnishing a single bail greater than twice the amount of the bond posted with the division. The bill also requires any court that places the name of a professional cash bail agent on the board pursuant to Section 16-4-112 (5) (e), C.R.S., and remains on the board for the same forfeiture for more than thirty consecutive days to order the division to declare the qualification bond to be forfeited.

            Background. Colorado statutes defines "bail bonding agent" or " bonding agent" to mean any person who furnishes bail for compensation in any court and is appointed by an insurer by power of attorney to execute or countersign bail bonds in connection with judicial proceedings and who is other than a full-time salaried officer or employee of an insurer; or a person who pledges cash or other property as security for a bail bond in connection with a judicial proceeding.

            Current Colorado statute requires bail bonding agents to be a licensed insurance producer appointed to represent an insurance company. However, any bail bonding agent who was licensed by the Division of Insurance, as of January 1, 1992, to write bail bonds as a cash bonding agent was permitted (grandfathered) to continue such licensure upon compliance with the other bail bonding statutory requirements. Current statutes require bail bonding agents to complete eight hours of education prior to licensure. Bail bonding licenses expire biennially on January 1. Each cash bonding agent is required to post a qualification bond of $50,000 with the division. In the event of a forfeiture of a cash bond, a cash bonding agent is prohibited from writing new bail bonds until the qualification bond is restored to $50,000. If any bond issued by a surety and bail bonding agent is declared forfeited, the court is required to order the division to suspend the license of the bonding agent and order the surety to pay the judgement. All bail bonding agents are required to file reports twice a year with the division. In 1992, according to the Sunset Review of "Colorado Regulation of Professional Bailbondsmen", there were 14 cash bonding agents and 226 surety bonding agents for a total of 240. Today, there are 10 cash bonding agents and 500 surety bonding agents for a total of 510 licensed bail bonding agents.

State Revenues

            The Division of Insurance believes that as many as 50 additional licensed surety bail bonding agents would seek licensure as cash bonding agents and would pay the current $200 biennial license fee. Assuming that 50 agents seek licensure as cash bonding agents under the provisions of this bill, $10,000 in Division of Insurance Cash Fund revenues will be generated in FY 1999-00.

State Expenditures

            The bill will increase the workload of the Division of Insurance due to an increase in the number of qualification bonds posted by cash bonding agents. Assuming that the division will need to verify each of the new cash qualification bonds, amend pre-licensure regulations, review and revise current pre-licensure educational courses, and administer the cash qualification bonds, 125 hours of an Investigator I at a cost of $3,302 will be required in FY 1999-00 and FY 2000-01. This impact is minimal and can be absorbed within the division's current spending authority.

            NOTE: The Division of Insurance and the Department of Law have indicated that the provisions of this bill could result in an increased number of complaints filed with the division and an increased number of administrative hearings as a result of court-ordered forfeitures. Currently, the division receives almost 2 complaints annually for each licensed bail bonding agent. It is the division's belief that surety bail bonding agents are to an extent "self-regulated" by the surety companies. While cash bail bonding agents are not "self-regulated" in such a way, the number of complaints against currently licensed cash bail bonding agents are not significantly different from the number of complaints against surety bail bond agents.

            For purposes of this fiscal analysis, it is assumed that as the result of this bill, the number of bail bonds issued will not change; only the ratio of cash bonds to surety bonds may change. While there may be an increase in the number of complaints and hearings, this fiscal note does not include any costs to the Department of Regulatory Agencies, Department of Law, or the Division of Administrative Hearings, Department of Personnel, due to potential additional complaints and hearings in FY 1999-00 and FY 2000-01. This bill will not affect the Judicial Branch.

            In the event that the number of complaints and required hearings increase substantially in future years due to the licensing of new cash bonding agents, the Department of Regulatory Agencies, the Department of Law, and the Department of Personnel may require additional appropriations in order investigate such complaints and conduct any necessary administrative hearings.

State Appropriations

            None required

Departments Contacted

            Regulatory Agencies  Law    Judicial Branch