HD3 - The Need for Regulation of Electronic Security Businesses

  • Published: 1993
  • Author: Board of Commerce
  • Enabling Authority: House Joint Resolution 365 (Regular Session, 1991)

Executive Summary:
A. Study Overview

House Joint Resolution 365, passed in the 1991 Session of the General Assembly, requested the Board of Commerce to study the necessity and feasibility of regulating electronic security businesses and report its findings to the Governor and the 1993 Session of the General Assembly.

The Board of Commerce, through the means of surveys, a public hearing, and written comments, reviewed the nature of this occupation, its effect on public health, safety and welfare, and the existing statutory requirements affecting the occupation.

The Board's recommendations are based on an extensive analysis of this information.

B. Key Findings

1. An existing statute requires that a state Class B Contractor's license be obtained when contracting for improvements to real property if the total value referred to in a single contract is more than $1,500, but less than $70,000 . A Class A license is required for contracts which exceed $70,000. This includes installation of alarm/security system services.

2. Local jurisdictions have the statutory authority to regulate the installation and maintenance of all alarm systems installed by alarm companies, including the authority to charge fees for excessive instances of "false alarms."

3. False alarms have become a problem in certain communities where incomes and property values are high and alarm systems are numerous. This has resulted in concern by those local governments that answering false alarms ties up police manpower and puts an additional strain on police services. The problem appears not to be one of state-wide proportions. For many communities it is not a problem at all.

4. The industry's trade association asserts that the lack of criminal background checks for entry into this occupation can allow ex-felons and criminals to work in the alarm industry and use the inside information obtained to burglarize their own customers.

C. Conclusions

Four major conclusions have been drawn as a result of this study:

1. The information and data received does not support the need for criminal background checks or any other drastic controlling measures in this occupation. The Board believes that excessive use of this kind of job-entry requirement, lacking clear and overwhelming evidence that the public is at immediate risk, is an unnecessary intrusion of police powers into the right of people to earn a living and be left alone.

2. The regulatory burden and costs associated with creating a separate, new program could not be justified.

3. An examination specific to the industry may be the most fair and efficient method of providing the public with some assurance of competence in the licensed security alarm industry.

4. An existing statute already provides the authority for local jurisdictions to control problems with the security alarm industry as they may arise.

D. Recommendations

Based on the above conclusions, the Board of Commerce recommends that no additional form of occupational regulation be imposed upon this occupation, but does recommend that the Board for Contractors develop an examination specific to the security alarm industry, and require that the owner or the Designated Employee of each security alarm firm successfully complete this examination when applying for a contractor's license applicable to this specialty.

The Board also recommends that a copy of this report be sent to the governing body of each Virginia city, town and county for the purpose of calling attention to regulatory powers already available, and to encourage local jurisdictions to enact appropriate ordinances where improper installations, use of faulty equipment, false alarms, or other issues involving this occupation are problematic.