Title of Regulation: 6VAC20-230. Regulations Relating to Special Conservator of the Peace (amending 6VAC20-230-30, 6VAC20-230-90).

Statutory Authority: § 9.1-150.2 of the Code of Virginia.

Public Hearing Information:

October 21, 2015 - 10 a.m. - Washington Building, 1100 Bank Street, Room B27, Richmond, VA 23219. (Note: Individuals wishing to attend the public hearing must present a photo ID at the security desk when entering the building.)

Public Comment Deadline: December 18, 2015.

Agency Contact: Barbara Peterson-Wilson, Director of Policy and Legislative Affairs, Department of Criminal Justice Services, 1100 Bank Street, Richmond, VA 23219, telephone (804) 225-4503, FAX (804) 786-6344, or email barbara.peterson-wilson@dcjs.virginia.gov.

Basis: Section 19.2-13 of the Code of Virginia requires persons appointed as a special conservator of the peace to be covered by a policy of liability insurance or self-insurance in an amount and with coverage as fixed by the Criminal Justice Services Board. Pursuant to § 9.1-150.2 of the Code of Virginia, the Criminal Justice Services Board is statutorily authorized to establish the amount and type of insurance coverage required for special conservators of the peace. It also has the statutory authority to adopt regulations establishing the qualifications of applicants for registration and to administer the regulatory system promulgated by the board.

Purpose: Special conservators of the peace (SCOPs) are unique actors in that they are typically citizens granted full arrest authority equivalent to law-enforcement officers. SCOPs can carry firearms and use lethal force when effecting arrests; they can use the seal of the Commonwealth and the word "police" on their badges and uniforms. SCOPs engage in similar activities as law enforcement, such as enforcing the laws of the Commonwealth, making arrests, and dealing with dangerous people and situations while on duty. Because their authority, responsibilities, and actions are similar to that of law-enforcement officers, SCOPs need to be adequately and similarly protected from potential claims of wrongdoing. Unlike governmental actors, who enjoy a certain degree of protection, coverage and in some cases, immunity, SCOPs employed by private corporations likely enjoy no immunity for their actions and therefore need adequate coverage when claims are made against them. For the same reasons, citizens interacting with SCOPs must also be afforded some degree of protection or ability to be made whole after suffering wrongdoing or misconduct by SCOPs.

Currently an SCOP applicant is required to maintain either a $10,000 surety or cash bond or a $10,000 general liability insurance policy. The $10,000 bond amount is the minimum amount that the board can fix pursuant to § 19.2-13 of the Code of Virginia; this requirement will be removed from the Code of Virginia pursuant to Chapters 766 and 772 of the 2015 Acts of Assembly. The Code of Virginia does not specify a minimum amount of insurance and provides the board with the authority to fix the amount and type of insurance coverage. The board evaluated the established minimum standards to determine whether it adequately protected individual SCOPs, employers of SCOPs, and private citizens interacting with SCOPs.

To this end, the board sought additional information and input from the Department of Criminal Justice Services (DCJS) and the Private Security Services Advisory Board (PSSAB). An expert from the Virginia Municipal League (VML) and an expert from the Virginia Department of Taxation, Division of Risk Management (DRM) both presented information to the board about bonds and insurance as it relates to the coverage of individuals with arrest authority. VML is statutorily authorized to provide insurance whose members include local governments, towns, and counties. VML is the insurance company for 150 police departments in Virginia. The Division of Risk Management protects Virginia's state government, other public entities, and certain qualified individuals from financial loss caused by legal liability, loss to property, and other hazards. DRM protects a diverse range of exposures for state government, constitutional officers, local governments, and others throughout Virginia.

The experts indicated that a cash bond is a bond paid in cash and is not secured by property or real estate. They further advised that cash and surety bonds merely protect an employer from dishonest acts of the employee (such as theft) and speculated that the bond requirement for special conservators was an antiquated method that was likely codified in § 19.2-13 prior to the emergence of insurance. Both experts advised that bonds do not act like insurance and do nothing to protect the public from misconduct or injury inflicted by special conservators of the peace. Ideally, the SCOP would be covered by both a bond (to protect the employer) and liability insurance (to protect the SCOP and public). The expert from DRM advised that additional coverage of a $500,000 faithful performance bond exists for all state employees.

The board was advised of the different types of insurance. General liability insurance covers situations resulting in injury or damage to another person or property. Self-insurance of one's property or interests against possible loss is established through a special fund for that specific purpose, instead of seeking coverage with an underwriter. Self-insurance is typically used by local and state governments. Law-enforcement liability insurance, a type of professional insurance, covers what general liability insurance does not, namely actions and misconduct arising out of arrests or the enforcement of criminal laws. Law-enforcement liability insurance covers errors of judgment (what the SCOP should have done), such as excessive use of force, wrongful detention, racial profiling, and infliction of mental anguish. Most law-enforcement claims are for errors of judgment and excessive use of force and, to a lesser degree, include claims for racial profiling and mental anguish. The main difference between general liability insurance and professional law-enforcement liability is that professional law-enforcement liability covers specific actions arising out of law-enforcement duties and actions.

The experts also advised the board that the industry standard for coverage of individuals with arrest authority is $1 million in professional law-enforcement coverage. VML insures all of its member officers and special conservators of the peace for at least $1 million per occurrence, and many police departments pay for additional coverage. By statute, sheriffs are covered by a $1.5 million liability policy and a $500,000 fidelity bond. The experts informed the board that there is a healthy, commercial market available for the purchase of professional law-enforcement liability.

In summary, the experts advised that a $10,000 bond and a $10,000 general liability insurance plan was not adequate coverage to (i) provide recourse for an individual harmed by SCOP actions or misconduct or (ii) protect the SCOP from claims arising out of his law-enforcement activities.

Prior to making a decision, the board also sought advice from the Private Security Services Advisory Board. The PSSAB recommended that the board increase the bond amount to $100,000 and to change the insurance amount and type to $500,000 in a general liability insurance plan. DCJS recommended increasing the bond amount to $100,000 and changing the insurance amount and type to $500,000 in professional law-enforcement liability insurance.

After considering all information and recommendations from experts, DCJS, and PSSAB, and mindful of ensuring the health, safety, and welfare of citizens and special conservators of the peace arising out of the law-enforcement duties of SCOPs, the board decided at its June 2014 meeting that special conservators of the peace must maintain either a $100,000 surety or cash bond or $500,000 professional law-enforcement liability in order to become eligible for registration and appointment. On May 7, 2015, the board decided to remove the proposal to increase the surety or cash bond and to strike the requirement from the regulations to conform to statutory language enacted by Chapters 766 and 772 of the 2015 Acts of Assembly.

Substance: The proposed changes reflect the board's statutory authority to amend the $10,000 general liability or self-insurance to a minimum of $500,000 in professional law-enforcement liability insurance. Further, the proposed changes reflect the removal of the cash or surety bond option to conform to the change in the Code of Virginia as enacted in Chapters 766 and 772 of the 2015 Acts of Assembly.

Issues: The primary advantage to the public is ensuring an increased opportunity for recourse in the event that an individual is harmed as a result of interacting with an SCOP. Individual SCOPs are also provided with increased liability protection for actions arising out of their conduct. The current requirements do nothing to protect the individual SCOP from defending against actions arising out of their errors of judgment. There are no disadvantages to the agency or the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The Criminal Justice Services Board (Board) proposes to amend its regulation for special conservators of the peace (SCOP) to change the type of insurance that SCOPs must be covered under and to increase the amount of insurance required from $10,000 to $500,000. Pursuant to Chapter 772 of the 2015 Acts of the Assembly, the Board also proposes to eliminate language that allowed SCOPs to carry a surety bond instead of insurance.

Result of Analysis. There is insufficient information to ascertain whether benefits will outweigh costs for this proposed regulatory action.

Estimated Economic Impact. Current regulation requires that special conservators of the peace (SCOP) have either a surety bond worth at least $10,000 or have at least $10,000 in comprehensive general insurance. In 2015, the General Assembly eliminated the choice for SCOPs to secure surety bonds; Board staff reports that the General Assembly made this change to SCOP legislation because surety bonds normally only provide coverage against economic losses caused by the covered employees theft and, so, would be an inappropriate instrument to cover SCOPs for claims made against them and to provide protection for the public from the misconduct of SCOPs.

For this reason, the Board also proposes to change the type of insurance required for SCOPs from comprehensive general insurance liability insurance to professional law-enforcement liability insurance which covers actions and misconduct that may arise during arrests or the enforcement of criminal laws. Upon consultation with the Private Security Services Advisory Board, the Virginia Municipal League and the Department of Taxation's Division of Risk Management, the Board also proposes to increase the amount of insurance coverage required from $10,000 to $500,000. Board staff reports that the proposed insurance coverage will likely cost individual SCOPs or their employers in the range of $2,500 to $25,000 per year. Board staff reports that rates will vary widely based on any number of factors including the revenues, operational risk and history of the employing business as well as the scope of practice of the SCOPs. Changing the type and amount of insurance required will better protect the public from harm caused by SCOP misconduct. There is insufficient information about the scope of misconduct experienced by citizens of the Commonwealth in a typical year to ascertain whether benefits will outweigh costs for these regulatory changes.

Businesses and Entities Affected. Board staff reports that there are 760 SCOPs registered with the Board. Board staff estimates that less than one percent of these SCOPs are individual proprietors that would qualify as small businesses and reports that all other SCOPs are in the employ of cities, counties, state agencies or large corporations. All of these entities and their employers will be affected by these regulatory changes.

Localities Particularly Affected. Localities that employ SCOPs will be particularly affected by this proposed regulation. Localities that currently hold surety bonds on their SCOPs may see increased costs as they will have to obtain insurance for them instead. Board staff reports that five localities currently hold surety bonds on their SCOP employees. Board staff further reports that the other 30 localities that employ SCOPs have law-enforcement insurance to cover them that is already greater than the limits set by the Board. These localities will likely not see increased costs.

Projected Impact on Employment. Increasing insurance requirements in this regulatory action and the elimination of the surety bond alternative will likely increase costs for employing SCOPs and may, consequently, decrease the number of individuals who are employed in this field.

Effects on the Use and Value of Private Property. To the extent that this regulatory action raises the cost of working as an SCOP, individual proprietor SCOPs will likely see decreased profits. Individual proprietor SCOPs whose costs increase to the point that their businesses are not profitable at all will likely close those businesses and find other employment.

Large corporations that employ SCOPs may experience some decrease in profits or they may choose to employ fewer SCOPs as a result of increasing insurance requirements.

Small Businesses: Costs and Other Effects. Individual proprietor SCOPs will have to pay likely much higher insurance premiums on account of this regulatory action.

Small Businesses: Alternative Method that Minimizes Adverse Impact. There are likely no alternative methods that would both meet the Board's goal and further reduce costs.

Real Estate Development Costs. This regulatory action will likely have no effect on real estate development costs in the Commonwealth.

Legal Mandate.

General: The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Code of Virginia and Executive Order Number 17 (2014). Section 2.2-4007.04 requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the report should include but not be limited to:

• the projected number of businesses or other entities to whom the proposed regulation would apply,

• the identity of any localities and types of businesses or other entities particularly affected,

• the projected number of persons and employment positions to be affected,

• the projected costs to affected businesses or entities to implement or comply with the regulation, and

• the impact on the use and value of private property.

Small Businesses: If the proposed regulation will have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include:

• an identification and estimate of the number of small businesses subject to the proposed regulation,

• the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the proposed regulation, including the type of professional skills necessary for preparing required reports and other documents,

• a statement of the probable effect of the proposed regulation on affected small businesses, and

• a description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation.

Additionally, pursuant to § 2.2-4007.1, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules is notified at the time the proposed regulation is submitted to the Virginia Register of Regulations for publication. This analysis shall represent DPB's best estimate for the purposes of public review and comment on the proposed regulation.

Agency's Response to Economic Impact Analysis: The Department of Criminal Justice Services concurs with the economic impact analysis of the Department of Planning and Budget.

Summary:

The proposed amendments (i) change the type of insurance under which special conservators of the peace must be covered; (ii) increase the amount of insurance required from $10,000 to $500,000; and (iii) pursuant to Chapters 766 and 772 of the 2015 Acts of Assembly, eliminate language allowing a special conservator of the peace to carry a surety bond instead of insurance.

6VAC20-230-30. Initial registration application.

A. Individuals are required to be registered pursuant to § 19.2-13 of the Code of Virginia in the category of special conservator of the peace. Prior to the issuance of a registration, the applicant shall meet or exceed the requirements of registration and application submittal to the department as set forth in this section. Individuals who carry or have access to a firearm while on duty must have a valid registration with firearms verification. The court may limit or prohibit the carrying of weapons by any special conservator of the peace as defined in § 19.2-13 F G of the Code of Virginia.

B. Each person applying for registration shall meet the minimum requirements for eligibility as follows:

1. Be a minimum of 18 years of age;

2. Successfully complete all initial training requirements for special conservator of the peace, including firearms verification if applicable, requested pursuant to the entry-level training standards in 6VAC20-230-160; and

3. Be a United States citizen or legal resident alien of the United States.

C. Each person applying for registration shall file with the department:

1. A properly completed application provided by the department;

2. His mailing address on the application;

3. Fingerprint cards pursuant to 6VAC20-230-40;

4. The applicable, nonrefundable application fee;

5. A drug and alcohol test pursuant to 6VAC230-50 6VAC20-230-50; and

6. Pursuant to § 19.2-13 C D of the Code of Virginia, documentation verifying that the applicant has secured a surety bond or cash bond in the amount not to be less than $10,000 executed by a surety company authorized to do business in Virginia, or a certificate of insurance reflecting the department as a certificate holder, showing a policy of comprehensive general professional law-enforcement liability insurance with a minimum coverage of $10,000 $500,000 issued by an insurance company authorized to do business in Virginia.

D. Upon completion of the initial registration application requirements, the department may issue a temporary registration letter for not more than 120 days at a time while awaiting the results of the state and national fingerprint search provided the applicant has met the necessary conditions and requirements. This temporary registration letter shall be taken to the circuit court where seeking appointment for special conservator of the peace.

E. Each registration shall be issued to the individual named on the application and shall be valid only for use by that individual. No registration shall be assigned or otherwise transferred to another individual.

F. Each registered individual shall comply with all applicable administrative requirements and standards of conduct and shall not engage in any acts prohibited by applicable sections of the Code of Virginia and this chapter.

G. Once the individual has met the requirements and received a temporary registration letter, he shall petition the circuit court for appointment in the jurisdiction where the individual will be employed.

H. Meeting the requirements of registration allows an individual to be eligible for appointment. Registration does not guarantee appointment.

I. Upon completion of an appointment by a circuit court, the individual shall file with the department a copy of the court order granting appointment as a special conservator of the peace. A final registration letter will be issued by the department. This registration letter shall be submitted to a specified entity for a state-issued photo identification card.

6VAC20-230-90. Reinstatement.

A. Individuals who do not renew their registration on or before the expiration date may not work as a special conservator of the peace until reinstatement requirements have been met. Pursuant to the Code of Virginia, all such persons must currently be registered with the department as a special conservator of the peace.

B. A renewal application must be received by the department within 60 days following the expiration date of the registration in order to be reinstated by the department providing all renewal requirements have been met. The department shall not reinstate renewal applications received after the 60-day reinstatement period has expired. It is unlawful to operate without a valid registration during the reinstatement period. The department shall not reinstate a registration that has become null and void due to not maintaining required insurance or surety bond coverage. The department will notify the court when an individual has not met the registration renewal requirements with the department. Prior to reinstatement, the following shall be submitted to the department:

1. The appropriate renewal application and completion of renewal requirements including required training pursuant to this chapter; and

2. The applicable, nonrefundable reinstatement fee.

C. A registration shall be renewed or reinstated only when all renewal application requirements are received by the department. After the 60-day reinstatement period, an applicant shall meet all initial application requirements, including applicable training requirements.

D. Following submittal of all reinstatement requirements, the department will process and may approve any application for reinstatement pursuant to the renewal process for the application.