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| Montana Administrative Register Notice 6-277 | No. 16 08/25/2023 | |
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BEFORE THE COMMISSIONER OF SECURITIES AND INSURANCE OFFICE OF THE MONTANA STATE AUDITOR
TO: All Concerned Persons
1. On June 23, 2023, the Commissioner of Securities and Insurance, Office of the Montana State Auditor (CSI) published MAR Notice No. 6-277 pertaining to the public hearing on the proposed amendment of the above-stated rule at page 534 of the 2023 Montana Administrative Register, Issue Number 12.
2. On July 20, 2023, a public hearing was held in person and electronically to consider the rulemaking. Testimony was provided by five opponents of the amended proposed rule; additional attendees were present but did not provide oral testimony. One written comment was received on July 24, 2023, by email.
3. CSI has amended the following rule as proposed, but with the following changes from the original proposal, new matter underlined, deleted matter interlined:
6.6.6006 BAIL BOND DOCUMENTS (1) through (4) remain as proposed. (5) A surety bail insurance producer licensed to sell, solicit, or negotiate commercial bail bonds pursuant to Title 33, chapter 17, MCA, who effects an arrest or surrender pursuant to 46-9-510(1), MCA, shall notify CSI in writing of the arrest or surrender within seven business days. (a) The written notice of the arrest or surrender shall provide the following information: (i) full name of the principal/defendant (ii) criminal court case number and county for which the principal's/defendant's bail bond was posted; (iii) dollar amount of the principal's/defendant's bail bond; (iv) address or precise location, date, and time of arrest, and any persons who assisted in an arrest, if an arrest was effected; (v) name, license number, and contact information of the producer who effected the arrest or surrender; (vi) description of probable cause for the arrest, if an arrest was effected; (vii) surrender location, date, and time (if known); (viii) local sheriff's office or police department that the producer notified of the intent to apprehend the principal/defendant, including the date and time of the notice, if an arrest was effected; (ix) local sheriff's office or police department that the producer notified after the arrest of the principal/defendant, including the date and time of the notice, if an arrest was effected; (x) an explanation if the notice of intent to apprehend the principal/defendant (xi) producer signature, contact information, and license number of the producer completing the form. (b) The form for providing the foregoing notice, a Surety Bail Bond Insurance Producer Arrest and Surrender Report, is available on the website of CSI. (c) As used in this rule, the "producer . . . who effects an arrest or surrender" refers to any producer who physically arrests or surrenders a principal/defendant or any producer who requests, orders, or otherwise causes the arrest or surrender of a principal/defendant. A "surrender" includes any action, process, or procedure by which a producer requests bail be exonerated pursuant to 46-9-510(2), MCA.
AUTH: 33-26-108, MCA IMP:
4. CSI has thoroughly considered the comments and testimony received. A summary of the comments and testimony received and CSI's responses are as follows:
COMMENT #1: Multiple commenters requested clarity on the phrase, "producer who effects an arrest or surrender." Commenters also questioned whether this phrase would encompass a producer who requests another person or entity to arrest the defendant.
RESPONSE #1: CSI has amended the rule to define a "producer . . . who effects an arrest or surrender" as the "producer who physically arrests or surrenders a principal/defendant or any producer who requests, orders, or otherwise causes the arrest or surrender of a principal/defendant." CSI realizes that, for example, where one licensed producer requests another licensed producer to arrest a principal/defendant, both producers would be required to submit reports.
COMMENT #2: Multiple commenters requested clarity on whether arrests that take place out of state need to be reported to CSI.
RESPONSE #2: CSI has amended the requirements of this rule to apply only to "A surety bail insurance producer licensed to sell, solicit, or negotiate commercial bail bonds pursuant to Title 33, chapter 17, MCA, who effects an arrest or surrender pursuant to 46-9-510(1), MCA . . ." Under this amended language, any out-of-state arrest or surrender only needs to be reported if the arrest or surrender was "effected" by a Montana licensed producer using the authority granted to Montana producers under 46-9-510(1), MCA. CSI would expect that most other states would not recognize the authority granted to Montana producers under 46-9-510(1), MCA, for arrests or surrenders outside the borders of Montana; however, it is certainly possible. Under this language, if the bondsman holds a Montana license and relies on 46-9-510(1), MCA, for the arrest or surrender, it must be reported. Presumably any arrest of a principal/defendant whose bail bond ensures an appearance in Montana will be surrendered in Montana, triggering a surrender report.
COMMENT #3: Multiple commenters asked if a bond "revocation" needs to be reported to CSI. One commenter submitted proposed language that would explicitly require that a "revocation" be reported.
RESPONSE #3: CSI understands that by using the term "revocation," commenters are referring to the process under 46-9-510, MCA, under which a bond may be exonerated upon the surety company surrendering a defendant to any peace officer or detention facility of the state. CSI understands this process may occur even if the bondsman had no part in the arrest, where for example the principal/defendant is arrested by law enforcement on unrelated charges. CSI's position is that this type of "revocation" plainly falls within the meaning of "surrender." However, to ensure there is no confusion, CSI has added a definition of "surrender" to include "any action, process, or procedure by which a producer requests bail be exonerated pursuant to 46-9-510(2), MCA."
COMMENT #4: One commenter submitted proposed language to make clear that surrenders and "revocations" be contemplated in the written notice and required information.
RESPONSE #4: CSI has amended (5)(a) to apply to arrests or surrenders and has amended subsections of (5)(a) to apply to arrests or surrenders or both. Response #3 addresses the concern that "revocations" should be reported.
COMMENT #5: One commenter pointed out that contrary to the statute, the proposed language in the rule at (5)(a)(x) requires that the producer provide an explanation if the notice is provided to law enforcement "less" than 6 hours prior to an arrest. One commenter suggested in writing that this explanation be provided for an "arrest or surrender."
RESPONSE #5: CSI agrees that the term "less" is incorrect in (5)(a)(x). In response, CSI has struck the word "less" in (5)(a)(x) and replaced it with "more." This is now consistent with the requirement in New Section 3(1)(a) of HB 62 that the intent to apprehend be reported no more than 6 hours prior to the arrest. CSI does not agree that "or surrender" should be included as HB 62 does not require notice to law enforcement of a surrender.
COMMENT #6: Multiple commenters suggested proposed language that would explicitly require bondsmen to report arrests for which they were not present, including out-of-state arrests that they requested.
RESPONSE #6: HB 62 is primarily focused on regulating arrests or surrenders that occur in Montana. The language as amended in this rule will capture any arrests or surrenders that occur in Montana. An out-of-state arrest that results in a Montana surrender will still require reporting of the Montana surrender. Any arrest that is at the request of a licensed producer will still require a report, even if the producer was not present for the arrest. This is sufficient to identify potential abuses.
COMMENT #7: Multiple commenters expressed confusion over the definition of the term "arrest," noting that upon posting bail for a principal the principal is already in their "custody." One commenter noted he could "chain them up in my basement, as long as I feed and water them. I am just their jailer . . . I'm not arresting them. I'm just apprehending them."
RESPONSE #7: CSI disagrees. Upon issuing a surety policy the producer does not immediately "arrest" the principal and hold the principal in detention or custody pending trial. To the contrary, the writing of a bail bond satisfies a condition of the release of a defendant from custody that has been set by a court. A licensed surety producer is granted the privilege to use reasonable force to arrest a defendant and surrender the defendant into the custody of the state, but only under circumstances described in HB 62 at New Section 3 and the amended 46-9-510, MCA. Any detainment or custody beyond what is specifically granted would be the subject of possible civil and criminal enforcement. CSI sees no need to clarify the concepts of arrest, custody, and detention in this rule as they are well-developed concepts in statute and case law. CSI notes that HB 62 will require education in these concepts as a prerequisite for licensing as a surety bail bond producer.
COMMENT #8: One commenter suggested removing the requirement to report the "address or precise location" in (5)(a)(iv) of an arrest and "surrender location, date, and time (if known)" in (5)(a)(vii). The commenter suggested instead that CSI require reporting of "details" of the arrest or surrender.
RESPONSE # 8: CSI appreciates the comment. CSI prefers to have specific requirements to report rather than nonspecific directives such as "details." To the extent that CSI has further questions, CSI can follow up with the producer. Alternatively, there is nothing preventing a producer from adding details to a report if the producer so desires.
5. Upon further review, CSI has struck four implementing statutes that were irrelevant to this rule and were inadvertently included in the proposal notice.
6. The effective date of this rulemaking is January 1, 2024.
/s/ Ole Olson /s/ Mary Belcher Ole Olson Mary Belcher Rule Reviewer Deputy Auditor Commissioner of Securities and Insurance, Office of the Montana State Auditor
Certified to the Secretary of State August 15, 2023.
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