LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 76th Regular Session
  
                                May 7, 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.), Committee Report 2nd House, Substituted
  
**************************************************************************
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB2617, Committee Report 2nd House, Substituted:  positive impact     *
*  of $182,110 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                              $91,055  *
          *       2001                               91,055  *
          *       2002                               91,055  *
          *       2003                               91,055  *
          *       2004                               91,055  *
          ****************************************************
  
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                         $49,305 *
*  2001                            41,750                          49,305 *
*  2002                            41,750                          49,305 *
*  2003                            41,750                          49,305 *
*  2004                            41,750                          49,305 *
***************************************************************************
  
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 in
municipalities with populations of one million or more 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
change the agency fee structure, and allow the agency board rather than
the General Appropriations Act to set certain types of registration
fees.  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 contacted officials of the Dallas, Houston and San Antonio
police departments in order to estimate the number of officers that might
work as extra job coordinators.  In total, approximately 250 officers
from these cities might work as an extra job coordinator exempted from
the Act. 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 from these metropolitan areas would
result in a revenue loss of $62,500 .

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.

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.

The bill would increase seven fees and decrease one fee.  According to
the Agency, the unarmed guard registration fee, currently set at $50
would be decreased to $25.  This fee generates $1,498,300, therefore
decreasing the fee to $25 is expected to result in a revenue loss of
$749,150.  The seven fee increases and increases due to the growth of the
registrant pool are expected to generate in aggregate a revenue gain of
$823,455.  However, it is anticipated that this revenue loss of $749,150
might be offset by additional revenue that the State will gain from
provisions of the bill that  authorize the Board to increase certain
licensing and registration fees, and provision which expand the agency's
regulatory authority to cover uniformed employees of businesses that are
open to the public.  Overall,  it is estimated that the State will see a
net revenue gain of approximately $74,305 ($823,455 - $749,150) from
these bill provisions.

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 and individuals licensed and registered 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, DG