1999

HOUSE BILL 99-1075

BY REPRESENTATIVES Kaufman, Dean, Larson, Lee, and Ragsdale;

also SENATOR Epps.

SECTION 1.  12-7-101, Colorado Revised Statutes, is amended BY THE ADDITION OF THE FOLLOWING NEW SUBSECTIONS to read:

12-7-101.  Definitions. As used in this article, unless the context otherwise requires:

(1.3)  "Bail insurance company" means an insurer as defined in section 10-1-102 (8), C.R.S., engaged in the business of writing bail appearance bonds through bonding agents, which company is subject to regulation by the division of insurance in the department of regulatory agencies.

(2.5)  "Compensated surety" means any person in the business of writing bail appearance bonds who is subject to regulation by the Colorado division of insurance, including bonding agents and bail insurance companies. Nothing in this subsection (2.5) shall be construed to authorize bail insurance companies to write bail bonds except through licensed bail bonding agents.

(6)  "On the board" means that the name of a compensated surety has been publicly posted or disseminated by a court as being ineligible to write bail bonds pursuant to section 16-4-112 (5) (e) or (5) (f), C.R.S.

SECTION  2.  Part 1 of article 4 of title 16, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read:

16-4-112.  Enforcement procedures for compensated sureties. (1) (a)  The general assembly hereby finds, determines, and declares that the simplicity, effectiveness, and uniformity of bail forfeiture procedures applicable to compensated sureties who are subject to the regulatory authority of the Colorado division of insurance are matters of statewide concern.

(b)  It is the intent of the general assembly in adopting this section to:

(I)  Adopt a board system that will simplify and expedite bail bond forfeiture procedures by authorizing courts to bar compensated sureties who fail to pay forfeiture judgments from writing further bonds;

(II)  Minimize the need for day-to-day involvement of the division of insurance in routine forfeiture enforcement; and

(III)  Reduce court administrative workload.

(2)  As used in this section, unless the context otherwise requires:

(a)  "Bail insurance company" means an insurer as defined in section 10-1-102 (8), C.R.S., engaged in the business of writing bail appearance bonds through bonding agents, which company is subject to regulation by the division of insurance in the department of regulatory agencies.

(b)  "Board system" means any reasonable method established by a court to publicly post or disseminate the name of any compensated surety who is prohibited from posting bail bonds.

(c)  "Compensated surety" means any person in the business of writing bail appearance bonds who is subject to regulation by the division of insurance in the department of regulatory agencies, including bonding agents and bail insurance companies. Nothing in this paragraph (c) shall be construed to authorize bail insurance companies to write bail bonds except through licensed bail bonding agents.

(d)  "On the board" means that the name of a compensated surety has been publicly posted or disseminated by a court as being ineligible to write bail bonds pursuant to paragraph (e) or (f) of subsection (5) of this section.

(3)  Each court of record in this state shall implement a board system for the recording and dissemination of the names of those compensated sureties who are prohibited from posting bail bonds in the state due to an unpaid judgment as set forth in this section.

(4)  By entering into a bond, each obligor, including the bond principal and compensated surety, submits to the jurisdiction of the court and acknowledges the applicability of the forfeiture procedures set forth in this section.

(5)  Liability of bond obligors on bonds issued by compensated sureties may be enforced, without the necessity of an independent action, as follows:

(a)  In the event a defendant does not appear before the court and is in violation of the primary condition of an appearance bond, the court may declare the bond forfeited.

(b) (I)  If a bond is declared forfeited by the court, notice of the bail forfeiture order shall be served on the bonding agent by certified mail and on the bail insurance company by regular mail within ten days after the entry of said forfeiture. If the compensated surety on the bond is a cash bonding agent, only the cash bonding agent shall be notified of the forfeiture. Service of notice of the bail forfeiture on the defendant is not required.

(II)  The notice described in subparagraph (I) of this paragraph (b) shall include, but need not be limited to:

(A)  A statement intended to inform the compensated surety of the entry of forfeiture;

(B)  An advisement that the compensated surety has the right to request a show cause hearing pursuant to subparagraph (III) of this paragraph (b) within fifteen days after receipt of notice of forfeiture, by procedures set by the court; and

(C)  An advisement that if the compensated surety does not request a show cause hearing pursuant to subparagraph (III) of this paragraph (b), judgment shall be entered upon expiration of thirty days following the entry of forfeiture.

(III)  A compensated surety, upon whom notice of a bail forfeiture order has been served, shall have fifteen days after receipt of notice of such forfeiture to request a hearing to show cause why judgment on the forfeiture should not be entered for the state against the compensated surety. Such request shall be granted by the court and a hearing shall be set within thirty days after entry of forfeiture or at the court's earliest convenience. At the conclusion of the hearing requested by the compensated surety, if any, the court may enter judgment for the state against the compensated surety, or the court may in its discretion order further hearings. Upon expiration of thirty days after the entry of forfeiture, the court shall enter judgment for the state against the compensated surety if the compensated surety did not request within fifteen days after receipt of notice of such forfeiture a hearing to show cause.

(IV)  If such a show cause hearing was timely set but the hearing did not occur within thirty days after the entry of forfeiture, any entry of judgment at the conclusion of the hearing against the compensated surety shall not be vacated on the grounds that the matter was not timely heard. If judgment is entered against a compensated surety upon the conclusion of a requested show cause hearing, and such hearing did not occur within thirty days after the entry of forfeiture, execution upon said judgment shall be automatically stayed for no more than one hundred twenty days after entry of forfeiture.

(V)  If at any time prior to the entry of judgment, the defendant appears in court, either voluntarily or in custody after surrender or arrest, the court shall on its own motion direct that the bail forfeiture be set aside and the bond exonerated, at the time the defendant first appears in court; except that, if the state extradites such defendant, all necessary and actual costs associated with such extradition shall be borne by the surety up to the amount of the bond.

(c)  Execution upon said bail forfeiture judgment shall be automatically stayed for ninety days from the date of entry of judgment; except that, if judgment is entered against a compensated surety upon the conclusion of a requested show cause hearing, and such hearing did not occur within thirty days after the entry of forfeiture, the judgment shall be automatically stayed as set forth in subparagraph (IV) of paragraph (b) of this subsection (5).

(d)  Upon the expiration of the stay of execution described in paragraph (c) of this subsection (5), the bail forfeiture judgment shall be paid forthwith by the compensated surety, if not previously paid, unless the defendant appears in court, either voluntarily or in custody after surrender or arrest, or the court enters an order granting an additional stay of execution or otherwise vacates the judgment.

(e)  If a bail forfeiture judgment is not paid on or before the expiration date of the stay of execution described in paragraph (c) of this subsection (5), the name of the bonding agent shall be placed on the board of the court that entered the judgment. The bonding agent shall be prohibited from executing any further bail bonds in this state until the judgment giving rise to placement on the board is satisfied, vacated, or otherwise discharged by order of the court.

(f)  If a bail forfeiture judgment remains unpaid for thirty days after the name of the bonding agent is placed on the board, the court shall send notice by certified mail to the bail insurance company for whom the bonding agent has executed the bond that if said judgment is not paid within fifteen days after the date of mailing of said notice, the name of the bail insurance company shall be placed on the board and such company shall be prohibited from executing any further bail bonds in this state until the judgment giving rise to placement on the board is satisfied, vacated, or otherwise discharged by order of the court.

(g)  A compensated surety shall be removed forthwith from the board only after every judgment for which the compensated surety was placed on the board is satisfied, vacated, or discharged or stayed by entry of an additional stay of execution. No compensated surety shall be placed on the board in the absence of the notice required by paragraph (b) or (f) of this subsection (5).

(h)  The court may order that a bail forfeiture judgment be vacated and set aside or that execution thereon be stayed upon such conditions as the court may impose, if it appears that justice so requires.

(i)  A compensated surety shall be exonerated from liability upon the bond by satisfaction of the bail forfeiture judgment, surrender of the defendant, or by order of the court. If the defendant appears in court, either voluntarily or in custody after surrender or arrest, within ninety days after the entry of judgment, the court, at the time the defendant first appears in court, shall on its own motion direct that the bail forfeiture judgment be vacated and the bond exonerated; except that, if the state extradites such defendant, all necessary and actual costs associated with such extradition shall be borne by the surety up to the amount of the bond.

(j)  If, within one year after payment of the bail forfeiture judgment, the compensated surety effects the apprehension or surrender of the defendant and provides reasonable notice to the court to which the bond returns that the defendant is available for extradition, the court shall vacate the judgment and order a remission of the amount paid on the bond less any necessary and actual costs incurred by the state and the sheriff who has actually extradited the defendant.

(k)  Bail bonds shall be deemed valid notwithstanding the fact that a bond may have been written by a compensated surety who has been placed on the board pursuant to paragraph (e) or (f) of this subsection (5) and is otherwise prohibited from writing bail bonds. The ineligibility of a compensated surety to write bonds because the name of the compensated surety has been placed on the board pursuant to paragraph (e) or (f) of this subsection (5) shall not be a defense to liability on any appearance bond accepted by a court.

(l)  The automatic stay of execution upon a bail forfeiture judgment as described in paragraph (c) of this subsection (5) shall expire pursuant to its terms unless the defendant appears and surrenders to the court having jurisdiction or satisfies the court that appearance and surrender by the defendant was impossible and without fault by such defendant. The court may order that a forfeiture be set aside and judgment vacated as set forth in paragraph (h) of this subsection (5).

SECTION 3.  16-4-109, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SUBSECTION to read:

16-4-109.  Disposition of security deposits upon forfeiture or termination of bond. (5)  The provisions of this section shall not apply to appearance bonds written by compensated sureties, as defined in section 16-4-112 (2) (c), which bonds shall be subject to the provisions of section 16-4-112.

SECTION 4.  12-7-103 (3), Colorado Revised Statutes, is amended to read:

12-7-103.  License requirements - application - qualification bond - forfeiture. (3) (a)  Each applicant who is to be authorized as a cash bonding agent pursuant to section 12-7-102 (1) shall be required to post a qualification bond in the amount of fifty thousand dollars with the division. The bond shall be to the people of the state of Colorado in favor of any court in this state, whether municipal, county, district, or other court. Any qualification bond for a cash bail bonding agent shall also be to the commissioner and the division to fulfill the purposes of this section. In the event of a forfeiture of a cash bonding agent's qualification bond, the division shall have priority over all other claimants to such bond. Such bond shall be conditioned upon full and prompt payment into the court ordering such bond forfeited. Bail bonding agents authorized as cash bonding agents pursuant to section 12-7-102 (1) may only issue bonds in accordance with the provisions of section 16-4-104 (1) (b) (III), C.R.S. In the event of a qualification bond forfeiture, a cash bonding agent shall be prohibited from writing new bail bonds until the qualification bond is restored to fifty thousand dollars.

(b)  If any bond issued by a cash bonding agent is declared forfeited, and judgment is entered thereon by a court of proper jurisdiction, and the judgment is served upon the bail bonding agent, personally or by certified mail, within ten days after the entry of said judgment, and the amount of the bond is not paid within a reasonable time to be determined by the court but not less than forty-five days or more than ninety days, such If the name of a cash bonding agent is placed 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, the court that placed the name of the cash bonding agent on the board shall order the division to declare the qualification bond of such cash bonding agent to be forfeited after a hearing as provided in section 12-7-106 (2). The division shall then order the cash bonding agent on the qualification bond to deposit with the court an amount equal to the amount of the bond issued by such cash bonding agent and declared forfeited by the court or the amount of the qualification bond, whichever is the smaller amount. The division shall suspend the license of such cash bonding agent until such time as all forfeitures and judgments ordered and entered against the cash bonding agent have been certified as paid or vacated by order of a court of record and another qualification bond in the required amount is posted with the division.

(c)  If any bond issued by a surety and bail bonding agent is declared forfeited by a court of proper jurisdiction, notice of any judgment entered thereon must be served upon both the surety and bail bonding agent, personally or by certified mail, within ten days after the entry of said judgment. If the judgment is not paid within a reasonable time, to be determined by the court, but not less than forty-five days or more than ninety days, If the name of a bail bonding agent, other than a cash bonding agent, is placed 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 forty-five consecutive days, the court that placed the name of the bail bonding agent on the board shall order the division to suspend the license of said bail bonding agent, after hearing pursuant to section 10-2-801, C.R.S., until such time as all forfeitures and judgments ordered and entered against said bail bonding agent have been certified as paid or vacated by order of a court of record. If the bail forfeiture judgment is not paid within fifteen days after the name of a bail insurance company has been placed on the board pursuant to section 16-4-112 (5) (f), C.R.S., the division shall also order the surety bail insurance company on the bond to pay the judgment after notice and hearing pursuant to sections 24-4-104 and 24-5-105, C.R.S.

SECTION 5.  12-7-106 (1) (d), Colorado Revised Statutes, is amended, and the said 12-7-106 (1) is further amended BY THE ADDITION OF A NEW PARAGRAPH, to read:

12-7-106.  Denial, suspension, revocation, and refusal to renew license - hearing - alternative civil penalty. (1)  The division shall deny, suspend, revoke, or refuse to renew, as may be appropriate, the license of any person engaged in the business of bail bonding agent for any of the following reasons:

(d)  Default in payment to the court if any bond issued by a bonding agent is forfeited by order of the court; Failure to satisfy, pay, or otherwise discharge a bail forfeiture judgment after having his or her name placed on the board pursuant to section 16-4-112 (5) (e), C.R.S., for more than forty-five consecutive days for the same forfeiture;

(k)  Continuing to execute bail bonds in any court in this state while on the board pursuant to section 16-4-112 (5) (e), C.R.S., where the bail forfeiture judgment that resulted in being placed on the board has not been paid, stayed, vacated, exonerated, or otherwise discharged.

SECTION 6.  12-7-109 (1) (g), Colorado Revised Statutes, is amended to read:

12-7-109.  Prohibited activities - penalties. (1)  It is unlawful for any licensee under this article to engage in any of the following activities:

(g)  Act as a bail bonding agent in any court of record in this state if such licensee is in default in securing any person's bond while the name of such licensee is on the board pursuant to section 16-4-112 (5) (e), C.R.S., or under any circumstance where a licensee has failed to pay a bail forfeiture judgment after all applicable stays of execution have expired and the bond has not been otherwise exonerated or discharged;

SECTION 7.  16-4-103 (3), Colorado Revised Statutes, is amended to read:

16-4-103.  Fixing of bail and conditions of bail bond. (3)  In any instance of bond forfeiture or judgment ordered by the court where bond is made by persons other than a compensated surety, as defined in section 16-4-112 (2) (c), or the defendant, the judge shall issue notice of declared forfeiture or judgment and afford an opportunity for hearing under section 16-4-110 to all persons pledging security for the defendant's appearance, to show cause, if any, why their security should not be declared forfeit and due the court. No judicial order or disposition of security pledged by third parties shall affect an order of forfeiture entered against a defendant except as may be expressly provided by the court.

SECTION 8.  Effective date - applicability. This act shall take effect July 1, 1999, and shall apply to bonds forfeited on or after said date.

SECTION 9.  Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.

____________________________ ____________________________

Russell George Ray Powers

SPEAKER OF THE HOUSE PRESIDENT OF

OF REPRESENTATIVES THE SENATE

____________________________ ____________________________

Judith M. Rodrigue Patricia K. Dicks

CHIEF CLERK OF THE HOUSE SECRETARY OF

OF REPRESENTATIVES THE SENATE

APPROVED________________________________________

_________________________________________

Bill Owens

GOVERNOR OF THE STATE OF COLORADO