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Administrative Rules To Be Considered

The following proposed rule amendments are currently under consideration by the Private Security Board. These proposals are provided as a courtesy to the public and the regulated industries.  They are in preliminary, draft form and may be subject to further change. Comments or suggestions may be submitted by email: https://www.dps.texas.gov/rsd/contact/psb.aspx

I.   Termination of License
This proposal is intended to address the situation in which current owners disagree over whether the license should be terminated (typically in a dispute over who should retain control over the license), and to clarify who is ultimately authorized to decide the issue.  Currently, consent of the majority owners is required for the reclassification or assignment of a license.  The proposed amendment establishes the same standard for the termination of a license.   The objection has been raised that this is an unworkable standard for a large publically-held corporation.  In recognition of this issue, staff has added language to require a decision by the board of directors.  Similar language is being proposed for the reclassification and  assignment sections of the rule.

RULE §35.26    Reclassification, and Assignment, and Termination

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(c) Other assignments will be permitted only where the majority owners of the original licensee maintain majority ownership of the proposed assignee, by resolution adopted at a duly called meeting of the board of directors, or by a written consent signed by all members of the board of directors.  The assignor must provide the department written documentation establishing the intended date of assignment and the continued ownership of the majority owners of the license, or a copy of the applicable board resolution or other documentation of the board's written consent to the assignment, and must ensure any new owners required to register have been approved by the department. The assignee may not perform regulated services prior to the proposed date of assignment or the date of the department's approval of all required registration applications for new owners, whichever is later.

(d) An additional assignment fee will be assessed as provided by this chapter upon assignment of a license under subsection (b) or (c) of this section.

(e) A license may only be terminated by the majority owners of the licensed company, by resolution adopted at a duly called meeting of the board of directors, or by a written consent signed by all members of the board of directors.  The licensee must provide the department written documentation reflecting the intended date of termination and establishing the intent of the majority owners to terminate the license,  or a copy of the applicable board resolution or other documentation of the board's written consent.

II.   Letters of Authority, Employment of Non-Commissioned Security Officers and Personal Protection Officers

The following proposals would clarify the authority of entities holding Private Business or Governmental Letters of Authority to employ personal protection officers, and authorize the employment of non-commissioned security officers by holders of private business letters of authority.

RULE §35.101   Private Business Letter of Authority

 (a) The security department of a private business, as defined in the Act, must obtain a letter of authority in order to employ a commissioned security officer or personal protection officer.

 (b) A security department of a private business In order to that employs, in a non commissioned capacity, an individual meeting the conditions of §1702.323(d) of the Act, a security department of a private business must obtain a letter of authority obtain a guard company license and must register the individual with the department.

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RULE §35.102    Governmental Letter of Authority

 (a) A political subdivision that employs a commissioned private security officer or personal protection officer must obtain a governmental letter of authority.

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III.   Continuing Education Requirements

Please see explanatory notes below, following the rule text.

RULE §35.161    Continuing Education Requirements

(a) An application to renew A a license, registration, endorsement, or commission may not be renewed submitted until the required minimum hours of department approved continuing education credits have been earned in accordance with the Act and this chapter. Proof of the required continuing education must be maintained by the employer and contained in the personnel file of the registrant's employing company. All registrants shall indicate they have completed the required minimum hours of department approved continuing education credits on their application for renewal. A renewal application shall also include the name of the school, school number, seminar number, seminar date of attendance, and credits earned number of hours attended, and course(s) of instruction attended.

(b) Participating owners, partners, and shareholders who perform regulated services on behalf of the licensed company shall comply with the continuing education requirements of this section applicable to the regulated service provided.  Participating owners, partners, and shareholders who do not otherwise perform regulated services shall complete a total of eight (8) hours of continuing education, seven (7) hours of which must be in subject matter that relates to the type of regulated service provided by the licensee, and one (1) hour of which must cover ethics. For purposes of this section, 'participating' refers to involvement in decisions governing the operation of the regulated business.   Nonparticipating owners, owners not required to register under the Act, partners, shareholders, noncommissioned security officers, and administrative support personnel are specifically exempted from the continuing education requirements.

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Explanations:

The proposed amendment to subsection (a) of §35.161 is intended to clarify that it is the registrant's responsibility to ensure compliance with the continuing education requirements prior to submission of the renewal application, and to address an inconsistency between the information required to be submitted at renewal and the information required to be provided to the student by the school in Rule 35.162.

The proposed amendments to subsection (b) are intended to address the situation in which registered owners also perform regulated services in their individual capacities.  The current rule does not expressly address the continuing education requirements for such individuals, referring only to those who are registered as a specific type of private security registrant (other than owners), or to nonparticipating owners (providing an exemption).  Current rule does not specifically address participating owners.  The proposed language clarifies this by addressing owners who are involvement in the business ("participating owners"), and distinguishing those participating owners who also independently perform regulated services from those who do not.

For example, the owner of a locksmith company may simply manage the office but not actually leave the office to perform locksmith services on his or her own.  Or, on the other hand, the alarm company owner may actually perform installations in addition to managing his employees.  The thought is that if the owner is actually performing duties that would otherwise require a separate registration, but they are allowed to perform those services without obtaining a separate endorsement because they are registered as owners, then they should be held to the same continuing education requirements as someone who is registered to perform those services.

By contrast, an owner who doesn't independently perform regulated services but only runs the business is subject to the default continuing education requirement of 8 hours (7 and 1), as a "participating owner." The exemption from continuing education for owners who are not involved in the business (non-participating owners) remains unchanged.

Whether participating or non-participating, only shareholders who own 25% or more are required to register under the Private Security Act.  Those owners holding less than 25% interest in the company are exempt from Chapter 1702, and are therefore not subject to the department's regulatory authority.