LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 76th Regular Session
  
                                May 4, 1999
  
  
          TO:  Honorable Ken Armbrister, Chair, Senate Committee on
               Criminal Justice
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB2617  by Bosse (Relating to the continuation of the
               Texas Board of Private Investigators and Private Security
               Agencies as the Texas Commission on Private Security and
               to the functions performed by that agency; providing a
               penalty.), As Engrossed
  
**************************************************************************
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB2617, As Engrossed:  negative impact of $(1,341,500) through the    *
*  biennium ending August 31, 2001.                                      *
*                                                                        *
*  The bill would make no appropriation but could provide the legal      *
*  basis for an appropriation of funds to implement the provisions of    *
*  the bill.                                                             *
**************************************************************************
  
General Revenue-Related Funds, Five-Year Impact:
  
          ****************************************************
          *  Fiscal Year  Probable Net Positive/(Negative)   *
          *               Impact to General Revenue Related  *
          *                             Funds                *
          *       2000                           $(670,750)  *
          *       2001                            (670,750)  *
          *       2002                            (670,750)  *
          *       2003                            (670,750)  *
          *       2004                            (670,750)  *
          ****************************************************
  
All Funds, Five-Year Impact:
  
***************************************************************************
*Fiscal    Probable Savings/(Cost) from    Probable Revenue Gain/(Loss)   *
* Year         General Revenue Fund         from General Revenue Fund     *
*                      0001                            0001               *
*  2000                           $41,750                      $(712,500) *
*  2001                            41,750                       (712,500) *
*  2002                            41,750                       (712,500) *
*  2003                            41,750                       (712,500) *
*  2004                            41,750                       (712,500) *
***************************************************************************
  
Fiscal Analysis
  
The bill would continue the Board of Private Investigators and Private
Security Agencies under the new name of the Private Security Commission
(the "Board" or "Agency") until September 1, 2003.  The bill would
exempt full-time peace officers who serve as "extra job" coordinators
from the provisions of the Private Security Agencies Act ( the "Act").
The bill would increase public representation on the Board from six
members to nine members.  The bill would apply the Act to uniformed
security employees of certain entities to which the general public has
access.  The bill would transfer the agency's administrative hearing
function to the State Office of Administrative Hearings (SOAH).   The
bill would allow the Agency to enter into reciprocal agreements with
other states.  The bill would remove the requirement for letters of
notification to be sent to certain law enforcement officials.
  
  
Methodology
  
The Agency has submitted two cost estimates for the bill on the amount of
revenue loss that would occur by exempting extra job coordinators from
the Act.  These estimates were prepared to offer a best case and a worse
case scenario.  The first estimate is based on 1,000 coordinators being
exempted while the second is based on 5,000 coordinators being exempted.
The methodology in the fiscal note uses 3,000 coordinators being
exempted as a midpoint between the two scenarios offered by the Agency.
Under current law, each of these people would pay $250 ($225 guard
company license fee and $25 owner registration fee) per year.  Exempting
the extra job coordinators would result in a revenue loss of $750,000.

Board member per diem is set at a maximum of $2,500 per year.  The
addition of three public members to the Board would result in an increase
cost of $7,500 per year.

Applying the Act to an individual who in the course of their employment
regularly come into contact with the public, and wears a uniform with any
type of badge or patch commonly associated with law enforcement or
security personnel, could result in a substantial revenue gain to the
General Revenue Fund as well as an increase in workload at the agency.
The provision would extend Board oversight to security personnel at
malls, amusement parks, athletic facilities, large corporate buildings,
etc.  Since the agency was appropriated 49% of the receipts it collects,
the state would see a net gain of 51 cents for every dollar, assuming
that the Agency was given additional appropriations to deal with the
increased workload.

Transferring the agencies administrative hearings process to SOAH would
result in an estimated net loss to the agency of $76,750 per fiscal year.
Although the agency would experience savings, given that it would no
longer need an administrative law judge, the agency would incur costs of
$112,000 for the retention of two legal staff to prepare cases for
hearings before SOAH; and an estimated $190,936 in costs for new expenses
relating to the billing from SOAH for all Agency hearings.  The Sunset
Commission comments that the costs tend to be more pronounced initially,
but as both agencies adjust their resources to accommodate the transfer
the cost should decrease.

Allowing the agency to enter into reciprocal agreements with other states
and provide provisional licenses or registrations to other states'
registrants would generate additional revenue for the state.  It is
estimated that if the Board were to enter into an agreement just with
Oklahoma, state revenue would increase by $71,250.  This estimate is
based on 15% of companies licensed in Oklahoma choosing to exercise their
eligibility for a license and registration in Texas.  In addition to
Oklahoma, Arkansas, New Mexico and Louisiana have expressed interest in
having reciprocal agreements.

The bill would remove the requirement for letters of notification to be
sent to certain law enforcement officials.  The Sunset Commission
relates that the Board processed approximately 42,000 registration
applications per year.  Assuming two letters per application at $1.50
(postage costs for business correspondence), this will save the Board
$126,000 (84,000 x 1.5) in postage costs per year and $252,000 in
postage costs for the biennium.
  
  
Local Government Impact
  
No fiscal implication to units of local government is anticipated.
  
  
Source Agencies:   467   Board of Private Investigators and Private
                   Security Agencies, 360   State Office of
                   Administrative Hearings, 116   Sunset Advisory
                   Commission
LBB Staff:         JK, MD, DG