WSR 98-20-080

PROPOSED RULES

DEPARTMENT OF LICENSING

[Filed October 6, 1998, 1:09 p.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 98-09-078.

Title of Rule: WAC 308-18-150 Private security guard company, private security guard, and armed private security guard fees.

Purpose: The purpose of the fee increase is to defray the cost of administration of the security guard program.

Statutory Authority for Adoption: Chapter 18.170 RCW, the laws relating to security guards and chapter 346, Laws of 1998, ESSB 6108.

Statute Being Implemented: Chapter 346, Laws of 1998, ESSB 6108.

Summary: The security guard program proposes to raise fees to cover the actual cost of doing business as required under RCW 43.24.086 which states that each business and profession program be self-supporting.

Reasons Supporting Proposal: The fee increase will help recover administrative costs of issuing security guard licenses for the current biennium.

Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Pat Brown, Department of Licensing, Olympia, (360) 664-2356.

Name of Proponent: Department of Licensing, Business and Professions Division, P.O. Box 9649, Olympia, WA 98507-9649, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: The security guard program proposes to increase fees to cover the actual cost of doing business as required under RCW 43.24.086 that states that each business and professional program be fully borne by that profession. The reasons supporting the proposal is that the fee increase will help recover the administrative costs of issuing security guard licenses.

Proposal Changes the Following Existing Rules: Fee Changes: Private security guard original license, old fee $35.00, proposed new fee $53.00; and armed private security guard original license, old fee $15.00, proposed new fee $24.00.

A small business economic impact statement has been prepared under chapter 19.85 RCW.

Small Business Economic Impact Statement

The 1998 supplemental budget request to raise private security guard fees above the I-601 limits was approved by the legislature. The Department of Licensing proposes to raise fees to cover the actual cost of administering the program as required under RCW 43.24.086, which states that each business and profession program be self-supporting. The program operates under an annual shortfall of approximately $90,500. The fee increase will not recover revenue shortfalls incurred in the past, but will address the present and future requirements. The department is not raising fees for additional spending authority, nor has the program included any increased cost of administration for the next biennium.

Industries Required to Comply

Businesses Affected by the Fee Increase: The Standard Industry Code (SIC) 7381 covers a broad range of occupations. The SIC includes: Security guards, private investigators, detective services, armored car services, dog rentals, fingerprint services, and polygraph services.

The occupations and industries that are affected by the proposed rule are: Private security guard individuals, armed or unarmed, licensed under chapter 18.170 RCW and principally employed as, or typically referred to as one of the following:

Security officer or guard

Patrol or merchant patrol service officer or guard

Armed escort or bodyguard

Burglar alarm response runner

Crowd control officer or guard

Private security guard companies licensed under chapter 18.170 RCW engaged in the business of providing the services of private security guards on a contractual basis may also be affected. However, neither the statute nor the rules require the company to pay the individual security guard's licensing fee.

Background Circumstances

Reason for Fee Increase: The need for the fee increase is because when the program set the original fees, the fees charged by the Washington State Patrol (WSP) for fingerprinting were contracted to the program at $15.00 for each fingerprint card submitted. Then in 1993, the contract expired and WSP increased the fee to $25.00. This has resulted in the collection of insufficient licensing fees.

The current fee for an unarmed security guard original application is $35.00. Twenty-five dollars of this $35.00 fee is paid to the Washington State Patrol (WSP) to compare the applicant's fingerprints to fingerprint records available to the WSP.

If an applicant desires to be an armed security guard, the applicant will submit with the application two sets of fingerprint cards and pay the fee for a security guard application ($35.00) and pay the armed security guard original application fee, which is $15.00, for a total of $50.00. For these applications, the program will submit the two sets of fingerprint cards to the WSP, which utilizes one set of the fingerprint cards to compare them to the fingerprint records available to the WSP. The second fingerprint card is forwarded to the Federal Bureau of Investigation (FBI) for a national criminal history records check. The cost for the FBI background check is $24.00 and the WSP charges $25.00 for their services. The program at this point has collected $50.00 in licensing fees and owes $49.00 for the applicant's background check.

The problem is compounded if the armed license is not requested at the time of unarmed licensure. The cost to the program for the required two fingerprint card background check from the WSP and the FBI is $49.00 and the armed guard licensing fee collected is $15.00. This process results in a shortfall of $34.00 for each armed security guard license issued, plus the cost for the program to issue the license.

Compliance Requirements

Description of the Proposed Rule: The proposed fee increases are as follows:

Cost of Compliance

(NOTE) Neither the statute nor the rule requires the company to pay for the individual security guard licenses.

COST PER $100 SALES

The average large business has a gross business income of $2,162,900. Cost per $100 of sales is 0.001 cents per each unarmed security guard employee.

The average small business has a gross business income of $114,146. Cost per $100 of sales is 0.016 cents per each unarmed security guard employee.

COST PER HOUR OF LABOR

Cost per one hour of labor for a full time unarmed guard is 0.01 cents.

Cost per one hour of labor for a full time armed guard is 0.01 cents.

Cost per one hour of labor for a half time unarmed guard is 0.02 cents.

Cost per one hour of labor for a half time armed guard is 0.03 cents.

Cost Comparison of Impact on

Small and Large Businesses

The following table provides an overview of the licensee business sizes.

Will the Rule Have a Disproportionate

Impact on Small Businesses?

The increase in the annual licensing fees per employee resulting from the rule is less for the small businesses than it is for the large businesses, and does not disadvantage the small business.

Will Compliance with the Rule Cause

Businesses to Lose Sales or Revenue?

The fee increases are across the board and there are no competitive advantages due to the increase.

Mitigation Steps: Reasonable Justification

for not Mitigating

The proposed rule does not place any additional responsibilities upon small businesses. The rule is solely for the purpose of meeting the requirement that professional licensing programs be fully self-supporting per the laws of Washington state, RCW 43.24.086.

How Have Small Businesses Been Involved

in the Rule Development?

Licensed security guard companies were notified that the department is proposing to increase fees and requested their written comments. The department will notify the affected industries of a public hearing and request their comments again before adoption of the rule.

Hearing Date and Location: November 13, 1998 - 10:00 a.m.-12:00 p.m., Labor and Industries, Room S117, 7273 Linderson Way S.W., Tumwater, WA 98501.

Contact Information: Department of Licensing, Business and Professions Division, P.O. Box 9649, Olympia, WA 98507-9649, fax (360) 753-3747, e-mail security@dol.wa.gov, Pat Brown, Administrator, (360) 664-2356, Mary Haglund, Program Manager, (360) 586-4567.

Date of Intended Adoption: November 16, 1998.

Proposed Effective Date: December 17, 1998.

A copy of the statement may be obtained by writing to Department of Licensing, Business and Professions Division, P.O. Box 9649, Olympia, WA 98507-9649, phone (360) 586-4567, fax (360) 753-3747.

RCW 34.05.328 does not apply to this rule adoption. The proposed amendment to WAC 308-18-150 is a procedural rule, not a significant rule. In addition, the Department of Licensing is exempt from this requirement.

Hearing Location: Labor and Industries, 7273 Linderson Way S.W., Suite S117, Tumwater, WA 98501, on November 13, 1998, at 10:00 a.m.

Assistance for Persons with Disabilities: Contact Mary Haglund by November 11, 1998, TDD (360) 526-2788, or (360) 586-4567.

Submit Written Comments to: Department of Licensing, Business and Professions Division, P.O. Box 9649, Olympia, WA 98507-9649.

Date of Intended Adoption: November 16, 1998.

October 5, 1998

Pat Brown

Administrator

OTS-2587.1

AMENDATORY SECTION (Amending WSR 97-17-050, filed 8/15/97, effective 9/15/97)

WAC 308-18-150  Private security guard company, private security guard, and armed private security guard fees. The following fees for a one-year period shall be charged by professional licensing services of the department of licensing:

[Statutory Authority: RCW 18.170.180(1), 43.24.086 and 34.05.482. 97-17-050, § 308-18-150, filed 8/15/97, effective 9/15/97. Statutory Authority: RCW 18.170 [18.170.180](1). 93-11-025, § 308-18-150, filed 5/7/93, effective 7/1/93. Statutory Authority: RCW 18.170.180. 91-22-112, § 308-18-150, filed 11/6/91, effective 12/7/91.]

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