Fiscal Note & Local Impact Statement
127 th General Assembly of Ohio
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BILL: |
DATE: |
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STATUS: |
SPONSOR: |
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LOCAL IMPACT
STATEMENT REQUIRED: |
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STATE FUND |
FY 2008 |
FY 2009 |
FUTURE YEARS |
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Security Systems Fund (New
Fund) – Department of Commerce |
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Revenues |
- 0 - |
Uncertain gain, dependent
on license and fine collections |
Uncertain gain, dependent
on license and fine collections |
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Expenditures |
- 0 - |
Increase in the hundreds
of thousands of dollars, up to available revenues |
Increase in the hundreds
of thousands of dollars, up to available revenues |
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Note: The state
fiscal year is July 1 through June 30.
For example, FY 2007 is July 1, 2006 – June 30, 2007.
·
Security Systems Fund. The bill
creates the Security Systems Fund in order to pay for the costs associated with
the licensing and registration requirements of the bill. The timing and the magnitude of the Fund's
revenues is uncertain as (1) fees for licensing security systems companies and
registering security systems company employees are to be set by rule, and (2)
the fact that the registration provisions do not take effect until 480 days
after the bill's effective date.
Expenses cannot be estimated until the Board adopts rules. Presumably, fees will be set in an amount
necessary to defray the costs of administering the program. Costs to operate the Advisory Board and
carry out the activities noted in the bill may be in the hundreds of thousands
of dollars, depending on the number of staff needed.
·
Short-term funding for the licensing and regulatory program. From
all appearances, the practical effect of the bill's various effective dates is
that, until licensing and regulatory activities commence, there will likely be
no revenues generated for deposit in the Security Systems Fund for the purpose
of developing and implementing the bill's various provisions. Assuming that were true, then it is unclear
as to how the Department of Commerce will finance the program's development and
implementation.
·
No
direct fiscal effect on political subdivisions.
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This
bill: (1) generally requires security
systems companies to be licensed by the Director of Commerce and their
employees who are technicians, salespersons, or operators to register with the
Director, (2) creates the seven-person Security Systems Advisory Board within
the Department of Commerce and requires the Board to adopt rules governing the
licensing and activities of security systems companies and their registered
employees, (3) generally prohibits local authorities from enacting any ordinance
that conflicts with the bill, and (4) creates the Security Systems Fund and
requires the money in the fund to be used to pay the costs the Department and
Board incur in administering the bill.
The Ohio Burglar and Fire
Alarm Association, a nonprofit security professional association, reported that
there are between 450 and 500 alarm dealers operating in the state. Fewer than 30 of those are part of national
corporations such as ADT. Most dealers
are sole proprietors that generally have one to five employees, indicating
there may be several thousand security systems company employees working in
Ohio.
Short-term funding for the licensing and
regulatory program
The
bill creates the Security Systems Fund to provide operating revenue for the
Board, but there would not be any revenue in the short term. This is because the bill: (1) requires Board members to be appointed
no later than 30 days after its effective date, (2) requires the Board no later
than 180 days after the appointment of its initial members to adopt the
prescribed rules, and (3) provides that the licensing and registration
provisions take effect 480 days after its effective date. Thus, the Department of Commerce would pay
for the program's development and implementation through other sources.
State fiscal effects
Start-up
and ongoing costs
There
would be a number of start-up costs associated with performing the duties and
responsibilities required by the bill.
It is uncertain how many companies will need to be licensed or how many
employees will need to be registered, and given that the Security Systems
Advisory Board does not yet exist and no rules governing the licensing and
activities security companies and their registered employees have been adopted,
it is difficult to make a very reliable projection of these start-up costs or
any ongoing operating expenses. Start-up costs for such things as a system to
track licenses and registrations; equipment such as computers, phone, and
furniture; initial payroll costs; contracted legal services; and maintenance,
travel, and other miscellaneous expenses may be in the hundreds of thousands of
dollars.
It is uncertain how many
personnel would be needed to help carry out the likely requirements to be
imposed by the Security Systems Advisory Board. However, the Department of Commerce would likely need
administrative staff as well as investigators.
Ongoing expenses for payroll, hearing officers, and maintenance costs
may be in the hundreds of thousands annually.
Security Systems Fund
The bill creates the
Security Systems Fund in order to pay for the costs associated with the
licensing and registration requirements of the bill, as well as to receive
license and registration fees and any fines issued as a result of violations. The timing and the amount of the Fund's
revenues is uncertain as fees for licensing security systems companies and
registering security systems company employees are to be set by rule. Also, the registration provisions do not take
effect until 480 days after the bill's effective date. In terms of expenses, it is likely that fees
will be set in an amount necessary to defray the costs of administering the
program. As noted above, costs to operate
the Advisory Board and carry out the activities noted in the bill may be in the
hundreds of thousands of dollars, depending on the number of staff needed.
Security
Systems Advisory Board
The
bill creates the seven-person Security Systems Advisory Board within the
Department of Commerce. The Board will
be responsible for adopting the rules governing the licensing and activities of
security systems companies and their registered employees. Board members will not be compensated, but
are eligible for the reimbursement of actual expenses incurred in the
performance of their duties, however, the bill does not specify how often board
meetings are to take place. Such
reimbursement may only cost the state several thousands of dollars or so
annually.
LSC fiscal staff: Jason Phillips, Budget Analyst