HBA-ATS C.S.H.B. 1023 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 1023 By: Garcia Licensing and Administrative Procedures 3/22/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Contractors account for 25 percent of wall and ceiling construction volume in the United States. The wall and ceiling industry encompasses drywall, lath and plaster, stucco, ceilings and acoustics, exterior insulation finish systems (EIFS), fireproofing, metal framing and architectural decorative ornamentation. EIFS has become the number one cladding (exterior siding) product in the commercial market, but its biggest opportunity for growth is in the residential sector. The prospect for growth in the residential market means an increase in the number of wall and ceiling contractors. Currently, there is no method to identify wall and ceiling contractors involved in the construction of multi-family and commercial projects. Without statutory provisions that identify and regulate contractors, the number of instances in which contractors may take advantage of homeowners through nonperformance or poor work, especially after a natural disaster, could increase. In addition, regulation of the industry may help track safety problems and protect workers. C.S.H.B. 1023 requires a wall and ceiling contractor to register with the Texas Commission of Licensing and Regulation (commission). It authorizes the commissioner of licensing and regulation to require an applicant to submit information that identifies the applicant and the type of business in which the applicant is engaged, if any. In addition, this bill requires an applicant to prove that the applicant has workers' compensation and general liability insurance coverage. If a person satisfies the requirements, the commission is required to issue a certificate of registration as a wall and ceiling contractor to that person. Without a certificate, a person is prohibited from acting as a wall and ceiling contractor for compensation. This prohibition does not apply to a wall and ceiling contractor who bids or accepts a contract for work on a single family, duplex, triplex, or quadraplex residential home. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Commission of Licensing and Regulation and the commissioner of licensing and regulation in SECTION 2 (Article 9034, V.T.C.S.) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 20, Title 132, V.T.C.S., by adding Article 9034, as follows: ARTICLE 9034. WALL AND CEILING CONTRACTORS Sec. 1. DEFINITIONS. Defines "acoustical ceiling," "commission," "commissioner," "department," "drywall," "person," and "wall and ceiling contractor." Sec. 2. ISSUANCE OF CERTIFICATE OF REGISTRATION; TERM. Requires the Texas Commission of Licensing and Regulation (commission) to issue a certificate of registration (certificate) as a wall and ceiling contractor to an applicant who possesses the qualifications established or adopted by rule under this article. Establishes the period of time during which a certificate is valid. Sec. 3. REGISTRATION REQUIREMENTS. (a) Requires a person to apply on a specific form and to pay any fees required by the commission. Requires an applicant to show evidence of financial responsibility in the manner required by the commissioner of licensing and regulation (commissioner). Authorizes the commissioner to require an applicant to submit information that identifies the applicant and the type of business in which the applicant is engaged, if any. (b) Requires an applicant to prove that the applicant has workers' compensation insurance coverage or a recognized alternative to workers' compensation insurance coverage. Requires an applicant also to provide proof that the person is covered by general liability insurance. Sets forth the evidence necessary to provide proof of insurance coverage. (c) Provides that an application must be notarized. (d) Requires the applicant to provide the commissioner the applicant's telephone number and mailing address, and, if necessary, the business address. (e) Requires an applicant that is a business entity to provide the name of each owner of the business entity, and the name and signature of the individual who filed the application for the business entity. Sec. 4. REGISTRATION RENEWAL. (a) Establishes the procedure under which a person who holds a certificate is authorized to renew it. (b) Requires a certificate holder who renews the certificate after the date on which the registration expires to pay a late fee set by the commission. Sec. 5. INVESTIGATIONS. Requires the department to investigate a violation of this article. Sec. 6. SUSPENSION, REVOCATION, AND RENEWAL OF REGISTRATION; REISSUANCE. (a) Authorizes the commissioner, after a hearing, to impose an administrative penalty, or suspend or revoke a person's certificate of registration, if the person is found to have made a material misstatement in an application for a certificate; wilfully disregarded or violated, or wilfully aided or abetted another person in the violation of this article or a rule adopted under this article; been convicted of a crime, an essential element of which is misstatement, fraud, or dishonesty, or a felony; or engaged in dishonorable or unethical conduct intended to deceive, defraud, or harm the public. (b) Authorizes the commissioner to reissue a certificate to a person whose certificate has been revoked under Subsection (a) if the person shows good cause for the reissuance of the person's certificate. Sec. 7. CERTIFICATION OF REGISTRATION REQUIRED; EXEMPTIONS. (a) Prohibits a person from acting as a wall and ceiling contractor for compensation unless the person holds a certificate. (b) Prohibits a person from bidding on or accepting a contract to engage in providing and installing light-gauge framing, drywall, or acoustical ceilings unless the person is registered as a wall and ceiling contractor. (c) Provides that this article does not apply to a wall and ceiling contractor who bids or accepts a contract for work on a single family, duplex, triplex, or quadraplex residential home. Sec. 8. ADMINISTRATIVE PENALTY. Provides that a person who violates this article or a rule adopted under this article is subject to an administrative penalty assessed by the commission as provided by Section 17, Article 9100 (Department of Licensing and Regulation), V.T.C.S. SECTION 2. Requires the commission and the commissioner to adopt rules under Article 9034, V.T.C.S., by December 1, 1999. SECTION 3. Effective date: September 1, 1999, except for Sections 7 and 8, which are effective March 1, 2000. SECTION 4. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 1023 modifies the original bill in SECTION 1 by deleting the provision (Section 8 in SECTION 1 of the original bill) that would have created a criminal offense punishable as a Class C misdemeanor for a person who knowingly or intentionally violates Section 7. Accordingly, the substitute redesignates proposed Section (9) to Section (8). C.S.H.B. 1023 modifies the original bill in SECTION 3 to make a conforming change.