LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
March 23, 1999
TO: Honorable Bob Turner, Chair, House Committee on Public
Safety
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2617 by Bosse (Relating to the continuation and
functions of the Texas Board of Private Investigators and
Private Security Agencies; providing a penalty.), As
Introduced
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2617, As Introduced: negative impact of $(123,526) 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 $(62,913) *
* 2001 (60,613) *
* 2002 (60,613) *
* 2003 (60,613) *
* 2004 (60,613) *
****************************************************
All Funds, Five-Year Impact:
**************************************************************************
*Fiscal Probable Probable Revenue Change in Number of *
* Year Savings/(Cost) from Gain/(Loss) from State Employees from *
* General Revenue Fund General Revenue Fund FY 1999 *
* 0001 0001 *
* 2000 $15,662 $(78,575) 1.0 *
* 2001 17,962 (78,575) 1.0 *
* 2002 17,962 (78,575) 1.0 *
* 2003 17,962 (78,575) 1.0 *
* 2004 17,962 (78,575) 1.0 *
**************************************************************************
Fiscal Analysis
The bill would continue the Board of Private Investigators and Private
Security Agencies (the "Board" or "Agency") until September 1, 2003.
The bill would increase public representation on the Board from six
members to nine members. The bill would apply the Private Security
Agencies Act (the "Act") to uniformed security employees of certain
entities to which the general public has access. The bill would require
registrants to and licensees to engage in continuing education for which
the agency would be responsible for tracking. The bill would transfer
the agency's administrative hearing function to the State Office of
Administrative Hearings (SOAH). The bill would reduce the registration
renewal fee for unarmed security guards from $50 to $25 and the time
frame for renewal from four years to two years. The bill would allow
the Agency to enter into reciprocal agreements with other states. The
bill would establish a $100 training fee for the Board to certify
handgun instructors. The bill would remove the requirement for letters
of notification to be sent to certain law enforcement officials.
Methodology
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.
The agency was appropriated 49 percent of the receipts it collects for
licensing individuals and companies. Based on the fact that the bill
would extend Board oversight to security personnel at malls, amusement
parks, athletic facilities, large corporate buildings, and others, the
revenue gain to General Revenue could be quite considerable offsetting
the increase in workload the bill would create. The state would see a
net gain in General Revenue of 51 cents for every dollar, assuming that
the Agency is given additional appropriations to deal with the increased
workload.
The bill would require continuing education of registrants and licensees
of the Agency. One Data Entry Clerk III would be needed to handle the
additional 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.
It is estimated that reducing the registration renewal fee for unarmed
security guards from $50 to $25 and the time frame for renewal from four
years to two years would result in a $299,650 loss for the biennium.
This estimate is based on 40% of unarmed security guards not renewing
their registration after two years. Applying the 40% turnover rate would
mean that 11,986 (29,966 x .4) individuals would not renew their
registration. [11,986 x $25 (difference of current fee of $50 and
proposed fee of $25)= $299,650]
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:
LBB Staff: JK, MD, BP, DG, SG