Many Private Alarm Contractors are Paying Licensing Fees to MUNICIPALITIES that are, in Most Cases, Unnecessary. We clarify which fees are legal, which are not, and what you can do to stop paying unlawful fees.
For approximately the last thirteen months, EWW, Ltd. has been working closely with the Illinois Electronic Security Alarm Association (IESA) concerning the unlawful attempt by many local cities, towns and villages to collect additional revenue from licensed Private Alarm Contractors and Private Alarm Agencies under the various forms of registration or license fees, permit fees, contractor fees, surety bonds, etc. The collection of these fees is unlawful because of a provision contained within the Private Detective, Private Alarm, Private Security, Fingerprint Vendor and Locksmith Act of 2004 (Act).
Home Rule Exemption
This provision, which has been in the Act since its inception in 1984 and is known as the “home rule exemption,” clearly states that only the State has the power to regulate Private Detectives (PD), Private Alarm Contractors (PAC), Private Security Contractors (PSC), Fingerprint Vendors and Locksmiths. The power to regulate has been construed by the Illinois Attorney General and state and federal courts to mean that no unit of county or local government may require that a licensed PD, PAC or PSC pay any kind of a registration or license fee to any unit of county or local government (the same will certainly apply to fingerprint vendors or locksmiths, but there have yet to be any cases on them). It is also absolutely clear and beyond any contest that any city, town or village that requires a PAC to purchase a surety bond is in error. There are two very distinct exceptions to this framework.
If, for example, ABC Alarm Company is located in a storefront in Arlington Heights, IL and Arlington Heights has an ordinance that requires all businesses that are located in that town to obtain a business license, then collecting a business license fee is allowed. As long as that ordinance applies equally to all businesses, no matter the type, located in the town, ABC Alarm Company will have to pay the fee. However, if ABC Alarm Company installs a fire alarm for a customer located next door in Mount Prospect, IL, ABC Alarm Company is exempt from having to obtain a business license or pay any kind of contracting or license fee to Mount Prospect.
A second exception concerns a “permit fee.” This exception is a little more slippery. If the town is just using the word “permit” instead of “license”, then the town would not be allowed to collect the fee. However, if the scope of the installation is such that a village building inspector has to inspect the work, a permit fee is allowed. Therefore, other than a business license for the town you are located in or a permit fee for an installation that will require an inspection (I am told this is rare), a Private Alarm Contractor should not pay any other fees or bonds to a city, town or village.
If you or your agency has been forced to pay a license fee under the circumstances described above, you have several options. Fred and I will be glad to represent you. We would immediately send off a letter to the town or village and follow up as necessary. This method will be the most expensive, costing between 1 and 2 hours of our time, if we are lucky.
Or, if you are a member of IESA, you need only email IESA Executive Director Kevin Lehan (firstname.lastname@example.org) with a short description of who, where and when and he will take over from there without cost to your agency. Over the past thirteen months Kevin and EWW, Ltd. have been instrumental in getting approximately 8 of 13 towns that have instituted these fees to reconsider after we supplied them with a variety of documentation from federal court, the Illinois Attorney General’s Office and the Illinois Department of Financial and Professional Regulation. The remaining 5 towns have played hardball with us based upon a calculated gamble that we would not file a lawsuit over the sporadic collection of $100 or $200. The IESA, Kevin Lehan and I have been working on a strategy to prove them wrong.
If you are a Private Alarm Contractor agency and not a member of IESA, you should be. The problems described above are only a fraction of the policy, education and legislative initiatives that IESA conducts throughout the year which clearly impacts the operations of all Private Alarm Contractors.
Door to Door Marketing
Finally, if you are a Private Alarm Contractor whose marketing model involves door to door solicitation and you have been asked to leave the corporate limits of Hillside or Oak Park, please contact me for further information or assistance. There may be a plan to get these towns to consider an exemption to their anti-peddling ordinances.