Untitled Texas Attorney General Opinion ( 2010 )

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT
September 22, 2010
Mr. Steven C. McCraw, Director Opinion No. GA-0800
Texas Department of Public Safety
Post Office Box 4087 Re: Whether the exemption for a person engaged
5805 North Lamar Boulevard exclusively in the business of repossessing
Austin, Texas 78773-0001 property, provided by section 1702.324(b)(3)
of the Occupations Code, applies only to
investigative services or to all services regulated
under the Private Security Act (RQ-0862-GA)
Dear Mr. McCraw:
You ask whether Occupations Code section 1702.324 exempts repossession agents from
regulation when they are engaged in any activities otherwise covered by the Private Security Act (the
"Act"), Occupations Code chapter 1702, or only when they are engaged in investigative activities
that are essential to theirrepossession efforts. ! TEx. Occ. CODE ANN. §§ 1702.001-.413 (West 2004
& Supp. 2010). The Texas Private Security Board (the "Board"), created under section 1702.021,
is a part of the Department of Public Safety, and "[t]he department shall administer this chapter
[1702] through the board." ld. § 1702.005 (West 2004); see also id §§ 1702.002(I-b), (5-a)
(West Supp. 2010) (defining "Board" and "Department"), 1702.021 (West Supp. 2010). The
Board is responsible for licensing investigations companies and security service providers. See id
§§ 1702.004(a) (West Supp. 2010) (authorizing the Board to license investigations companies and
security service providers); 1702.102(a) (describing security services); 1702.104 (describing
investigations company). To act as an investigations company or offer to perform the services
of an investigations company, a person must hold a license as an investigations company. See id
§ 1702.1 01 (West 2004). Similarly, a person must be licensed as a security services contractor to
"act as an alarm systems company, armored car company, courier company, guard company, guard
dog company, locksmith company, or private security consultant company." ld. § 1702.1 02(a)(l)
(West Supp. 2010). "A person acts as a locksmith company" ifhe or she "sells, installs, services,
or maintains, or offers to sell, install, service, or maintain, mechanical security devices, including
deadbolts and locks; ... advertises services offered by the company using the term 'locksmith,' or
"includes the term 'locksmith' in the company's name." ld § 1702.1056(a); see id § 1702.2227
'Request Letter at I (available at http://www.texasattorneygeneral.gov). You identity a person within the
exemption fonnd in Occupations Code section 1702.324(b)(3) as a "repossession agent," and we will also use that term.
Id.
Mr. Steven C. McCraw - Page 2 (GA-0800)
(stating that an individual acts as a locksmith if the individual performs certain services); see also
id § 1702.22 1(a) (requiring individuals who perform activities regulated by chapter 1702 to register
with the Board and be employed by a licensed company). Unlicensed persons who violate chapter
1702 are subject to a civil penalty. See id. § 1702.381.
Subchapter N, chapter 1702 provides numerous exceptions to the application of this chapter.
See id. §§ 1702.321-.332(West2004 & Supp. 2010); see also id §§ 1702.321(a) (West Supp. 2010)
(excepting governmental officers or employees while performing official duties), 1702.322 (West
Supp. 2010) (excepting peace officers). You inquire about section 1702.324(b)(3), which provides
that "[t ]his chapter does not apply to" various persons engaging in specified business activities,
including "a person engaged exclusively in the business of repossessing property that is secured by
a mortgage or other security interest." !d. § 1702.324(b)(3) (West Supp. 2010). You also raise
section 1702.324(c), which places limits on the exemptions found in section 1702.324(b). See id
§ 1702.324(c).
As a threshold matter, we will briefly describe "the business of repossessing property" that
is exempted by Occupations Code section 1702.324(b)(3). There is no licensing requirement for
repossession companies or repossession agents, but the Business and Cornmerce Code chapter 9,
which regulates secured transactions, places certain limits on the repossession process. See TEx.
Bus. & COMM. CODE ANN. § 9.1 0 1 (West 2002) (stating that chapter 9 may be cited as the "Uniform
Commercial Code-Secured Transactions"). After a debtor's default on a secured transaction,
section 9.609 authorizes the secured party to take possession of the collateral pursuant to judicial
process or "without judicial process, if it proceeds without breach of the peace.,,2 Id § 9.609(b)(2).
The secured party may contract with a repossession company to carry out a non-judicial
repossession. See, e.g., Chapa v. Traciers & Assocs., 267 S.W.3d 386,389 (Tex. App.-Houston
[14th Dist.] 2008, no pet) (noting involvement of credit corporation, repossession company, and
repossession agents in a non-judicial repossession).
With this background in mind, we turn to your question. You ask whether section
1702.324(b)(3) exempts repossession agents from regulation when they are engaged in any of the
activities otherwise covered by the Act or only when they are engaged in investigative activities that
are essential to their repossession efforts. Request Letter at 2. You state that "[h]istorically, this
exemption has been viewed as permitting repossession agents to engage in certain investigative
activities, such as locating individuals holding secured property, which are integral to the
repossession of property but also within the ambit of the Private Security Act." Id at 1. "It has now
been suggested that section 1702.324(b)(3) is a broad exemption that permits repossession agents
to engage in any of the activities covered by the Act, and in particular activities otherwise limited
to locksmiths, without being subject to the Act's regulatory provisions." Id. at 1-2. The historical
view you cite is based on the fact that the exemption "was originally enacted as part of a statute
'See Mehan v. Wameo XXVIII, Ltd, 138 S.W.3d 415, 418-19 (Tex. App.-Fort Worth 2004, no pet.)
(detennining that breaking and entering fenced, gated, and locked property to repossess inventory would constitute a
breach of the peace).
Mr. Steven C. McCraw - Page 3 (GA-0800)
which was narrowly focused on private investigators and private security activities." Id. at 2; see
also Act of May 27, 1969, 61st Leg., R.S., ch. 610, § 14(a)(6), 1969 Tex. Gen. Laws 1807, 1810.
The Act did not regulate locksmiths until 2003. See Request Letter at 2 n.5; see also Act of May 30,
2003, 78th Leg., R.S., ch. 936, §§ 8, 13,2003 Tex. Gen. Laws 2795, 2797-98.
We fust note that an amendmentto a statute must be construed in view of the original statute,
and the amendment and other sections of the statute must be construed as a harmonious whole. See
Schlichtingv. Tex. State Bd. ofMed. Exam 'rs, 310 S.W.2d557, 563 (Tex. 1958). Thus, we may not
ignore the provisions of the Act relating to locksmiths, even though they were adopted after the
section 1702.324(b)(3) exemption for repossession agents. See generally id.
We read section 1702.324(b)(3) in the context of the Act as a whole. See City of San
Antonio v. City of Boerne, III S.W.3d 22, 25 (Tex. 2003) (stating that the Legislature's intent is
determined from the entire act and not just isolated portions); see also Schlichting, 310 S.W.2d at
563 (stating that an amendment and other sections of the statute must be construed as a harmonious
whole). Section 1702.324(b) provides that "(tJhis chapter does not apply to" various persons
engaging in specified business activities, thus making the chapter as a whole inapplicable to the
identified persons, including repossession agents. TEx. Occ. CODE ANN. § 1702.324(b) (West Supp.
2010) (emphasis added). To determine and give effect to the Legislature's intent, a court
"Iook[s] first to the statute's language," and "[i]fthe statute's language is unambiguous, its plain
meaning will prevaiL" Leland v. Brandal, 257 S.W.3d 204, 206 (Tex. 2008). The "chapter"
regulates a number of security companies, including locksmith companies. See TEx. OCC. CODE
ANN. §§ 1702.102(a)(l) (West Supp. 2010) (requiring locksmith company to be licensed),
1702.2865 (requiring customer authorization to perform certain locksmith services).
Thus, the section 1702.324(b)(3) exemption applies to repossession agents when they are
engaged in any activities covered by the Act and not merely investigative activities, subject to the
limits stated in section 1702.324(c). Section 1702.324(c) provides as follows:
The exemptions provided by Subsection (b) apply only to a person
described in that subsection while the person is perfonning services
directly related to and dependent on the provision of the exempted
service that does not otherwise require licensing under this chapter.
The exemptions do not apply to activities or services that are
independent of the service or profession that is the basis for the
exemption.
Id. § 1702.324(c).3
3Subsection 1702.324(c) of the Occupations Code was adopted in 2007 and has not yet been construed by a
judicial decision or attorney general opinion. See Act of May 28, 2007, 80th Leg., R.S., ch. 906, § 16, 2007 Tex. Gen.
Laws 2261, 2267-68.
Mr. Steven C. McCraw - Page 4 (GA-0800)
When section 1702.324(c) is read together with the subsection 1702.324(b)(3) exemption,
we see that the exemption applies to a repossession agent only when he or she is "performing
services directly related to and dependent on the provision of [repossession1 . . . that does not
otherwise require licensing under this chapter." Id.; see Leland, 257 S.W.3d at 206 (stating that a
court determines the Legislature's intent from the plain meaning of a statute). The section
1702.324(b)(3) exemption for repossession agents does not include locksmith services "that are
independent of the service" of repossession. TEx. Occ. CODE ANN. § 1702.324(c) (West Supp.
2010). Thus, it does not authorize a repossession agent to serve as a locksmith company without
holding the requisite license under chapter 1702. See id. It merely allows such person to continue
to perform ordinary repossession services that are also locksmith services without having to secure
a license or registration under the Act. Whether any locksmith services are "directly related to and
dependent on the provision of' repossession services involves questions of fact, which cannot be
addressed in an attorney general opinion. See Tex. Att'y Gen. Op. Nos. GA-0648 (2008) at 7,
GA-0459 (2006) at 4.
The Board has the power and duty to determine the qualifications of license holders, to
investigate alleged violations of chapter 1702 and of Board rules, and to adopt rules necessary to
implement chapter 1702. See TEx. Occ. CODE ANN. § 1702.061(d) (West Supp. 2010); see also id.
§ 1702.061 1(a) (providing that the Board may only adopt rules under chapter 1702 on the approval
of the Public Safety Commission). Given the Board's regulatory authority, we suggest that it make
appropriate determinations about the locksmith services or other security services that are "directly
related to and dependent on the provision of' repossession services. Id. § 1702.324(c).
Mr. Steven C. McCraw - Page 5 (GA-0800)
SUMMARY
The Private Security Act provides for licensing and regulating
investigations companies and security service providers, which
include locksmiths. Repossession agents are exempted from
licensing under the Act for investigative and security services, but
only while "performing services directly related to and dependent on
the provision of the exempted service that does not otherwise require
licensing under" the Act. TEx. OCe. CODE ANN. § 1702.324(c)(West
Supp.201O). This exemption applies to security services as well as
investigative services. Whether any locksmith services are "directly
related to and dependent on the provision of' repossession services
involves questions of fact, which cannot be addressed in an attorney
general opinion.
DANIEL T. HODGE
First Assistant Attorney General
DAVID J. SCHENCK
Deputy Attorney General for Legal Counsel
NANCY S. FULLER
Chair, Opinion Committee
Susan L. Garrison
Assistant Attorney General, Opinion Committee