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Regulation of Texas Alarm Industry May Change…

Texas Department of Public Safety Sunset Hearings- 5/23/18

By: Brad Shipp, TBFAA & Trevor Hand, McWilliams Governmental Affairs Consultants

The Sunset Advisory Commission held a hearing on 5/23/18 with invited and public testimony to review the Texas Department of Public Safety (TxDPS) to review the agencies’ operations and make recommendations to improve its functions as it continues.

The Commission will vote on its recommendations on August 29th or 30th.

Summary of Sunset Recommendations Impacting the Alarm Industry

  • Reconstitute the Private Security Board as an advisory committee.
  • Deregulate 10 registrations for individuals and entities that do not directly provide private security
    services.
  • Require individuals who provide private security services to obtain a license, rather than a registration
    or endorsement, and remove requirements for regulated individuals to be affiliated with companies.
  • Direct DPS to adopt a risk-based inspection process and provide DPS a full range of sanctions to
    enforce regulations.

To review the recommendations visit the Commission webpage

The Sunset Advisory Commission presented their recommendations. 

  • Amy Trost, Project Manager for the Sunset Advisory Commission, said Sunset staff found the regulation of the private security industry through the Private Security Board (PSB) delves too deeply into business issues and found 16 types of licenses that are unnecessary.
  • Texas Public Safety Commission Chairman Steven Mach said he has served under Governor Abbott’s re-appointment since March of last year.  He believes the Commission’s structure allows them to leverage outside perspectives in seeking opportunities to enhance its efforts.  He said TxDPS employees more than 10,000 people and manages many complex programs.  Chairman Mach said it was important for the PSC to show there is no daylight between their management function and the TxDPS operations.  He said TxDPS Director, Col. Steve McCraw, is very dedicated and responsive and is joined by a talented team around him.

The Department of Public Safety Testified

  • TxDPS Director, Col. Steve McCraw said the PSC is engaged and takes constituent calls seriously.  He said review of their operations only benefits them as an agency.  He said their mission is to protect Texans from crime, counterterrorism, mass shootings, protests, etc.
  • RenEarl Bowie, Assistant Director in charge of the Regulatory Services Division at TxDPS, said the guidance in Sunset staff Recommendation 3.2 is to deregulate individuals who don’t directly provide private security services.  He said TxDPS would need clarification from the Legislature if it would be the intent to deregulate people who own private security companies, since even though they themselves my not directly provide security services, they do manage and oversee people who offer such services.  He also said regarding Recommendation 3.4, which deal with the requirements for a person to be affiliated with a company, TxDPS would similarly need guidance as to whether individuals would then become their own company or if they could act without adhering to the Occupations Code requirements currently placed on companies such as having insurance, etc.
  • Patricia James, Private Security Board (PSB) Chair, said they are a Governor-appointed Board that was put in place long before they were regulated by TxDPS.  She said they are composed of 5 industry members and 2 private members.  She said they vote on rules and have hearings if someone is denied a license, though a person can appeal to the State Office of Administrative Hearings (SOAH) and then the PSB has ultimate authority. She said they are not necessarily opposed to the recommendation to turn PSB into merely an advisory board, but they are concerned about having their rules made by people who don’t necessarily understand their business.  She said the TxDPS has done all it could to protect Texas citizens, and although an advisory committee would be fine, the PSB needs to at least have a liaison to discuss rules that impact the industry before they are adopted. Ms. James said the PSB generally agrees with the Sunset staff recommendations, but with respect to Recommendation 3.2, they have some concerns, and there are probably some areas that could be moved from TxDPS.  She said private investigators are not the Hollywood stereotype.  She said almost everything they do winds up in court, and security guards are carrying guns.  She said sometimes she finds runaway children and has to work closely with a law enforcement agency, so there is a close relation.  She said it is in the best interest of Texans for security guards to be regulated by TxDPS.  She said they have digitized fingerprints and other things that have been good work together with TxDPS, and she would hate to see that come to an end. Chair James said when you own a company, you hire people registered under your company.  She said it seems the Sunset recommendation is to have no more owner licenses, and everyone instead just have their own license.  She said TxDPS put the owner manager in place so there is someone to go to if there is a problem, because otherwise with all the individual people out there it would be hard to regulate.  She said regarding recommendation 3.3, it seems to her there would be no more licensing.  She said they seem to be suggesting that anyone could just come take the test and become a private investigator, which would be disastrous because they wouldn’t know the legalities associated with the business, i.e. that you can’t go in a person’s backyard etc.   She said there is not a school that can teach what people learn on the job, so it is important not to change what is needed to get a license.  She said part of the continuing education is ethics and board rules, and it is working so well, she would hate to see so many drastic changes at one time.
  • Mr. Bowie noted that the Private Security Act lets TxDPS do criminal background checks on individuals in the industry.  He said Occupations Code Chapter 1702 requires TxDPS to act when an individual has a disqualifying criminal act, so TxDPS believes there is a strong public safety nexus in doing a criminal background check.

The Commission later took public testimony on this issue.

  • Susan Griswold, Regional President of the Associated Security Professionals of Texas, said being under TxDPS has increased their program to better their industry immensely.  She said although they agree with a lot of the Sunset recommendations, they do have concerns about the licensed manager deregulation recommendation in the Sunset staff report.  She said they also are concerned about deregulating the owners of those companies, because those owners can be convicted sex offenders or murderers etc. and would be able to operate a security company in Texas.  She said deregulating the officers from being affiliated with a company would also be a detriment for TxDPS to regulate.  She said affiliating a police officer with a law enforcement agency is required, and wondered why wouldn’t they want to hold security officers to the same standard.
  • Edmund Martin of the Texas Association of Licensed Investigators said regulation is necessary for their industry and deregulating it could put some chaos into the industry as there are always people that don’t follow the rules.  He said that TxDPS deals with about 2,000 managers who regulate about 5,000 private investigators, and would take much more time for TxDPS if those investigators were going straight to them instead of through their manager,.  He likened the prospect of deregulating this industry to the chaos that would ensue if they removed all the stoplights and stop signs from the road and asked to allow them to continue their current manager structure.
  • Brad Shipp, Executive Director of the Texas Burglar and Fire Alarm Association (TBFAA) said a number of groups support their general approach including the South Texas Alarm Association, North Texas Alarm Association, and the Houston Gulf Coast Alarm Association. He also mentioned written testimony included from the False Alarm Reduction Association, which is a group of government regulators at the local level from throughout Texas, the U.S., and Canada that regulate the alarm industry, as well as a letter from Private Security Board Member Debbra Ulmer.  He explained that because DPS largely focuses on law enforcement with a subset of its functions relating to regulation of industry, it is important to retain the perspective that comes from the Private Security Board and should therefore retain its authority and influence within the structure of the agency.  He said Texas citizens will expect private security services to be performed by reputable professionals that have gone through background checks from managers on down, and deregulating people with access to sensitive and private information and control over companies would be a big step backward.
  • Paul Rusch, Vice President of Security for TBFAA, said that removing the licensing and background checks for sales people would be a problem.  As a qualified manager, he said he has done sales, installs, and trained and hired both salespeople and installers, so he understands all aspects. He provided the example of having an interested customer interested in security system that has done research on a company and verified that they are indeed licensed by DPS, so it is reasonable for him to assume that the salesperson that shows up at his house has had a background check. He explained that they first thing they instruct their salespeople to do is a site survey by walking around the house and look for vulnerabilities for entry points, go into every part of the home, ask where valuables, jewelry, handguns, and cash may be stored to understand what solution will best meet their needs. Once this has been done, he said they will provide a good, better, and best solution for a person’s home, which most people do not take the top of the line option, leaving vulnerabilities. When writing an agreement with that person, he will collect emails, passwords, contact information, Social Security Numbers, date of birth, and other personal identifying information, which will then also be given to the installer when he is setting up the system. He said maintaining licensing for installers but removing for salespeople makes no sense, as they both have access to the same information, and can put citizens at risk that assume they both have had a background check conducted.