HBA-MPA H.B. 1822 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1822
By: Yarbrough
Licensing & Administrative Procedures
3/9/1999
Introduced




BACKGROUND AND PURPOSE 

Currently, the Air Conditioning and Refrigeration Contractor License Law
(Act) requires any air conditioning and refrigeration contractor doing
business  in Texas to hold either a municipal or a state license.  It
provides several exemptions from licensure, most notably for apartment
maintenance staff.  There are 11,000 licensed contractors in Texas, and
they report that there may be that many unlicensed contractors operating
outside the Act.  The Act is administered by the Texas Department of
Licensing and Regulation, and 60 percent of the department's investigations
involve the Act. 

The department has received funding to maintain only minimal enforcement of
the Act.  It has been able to investigate consumer complaints, but has not
had adequate staff to pursue unlicensed contractors and bring them into
compliance.  H.B. 1822 clarifies provisions of the Act and strengthens
penalties for operating as a contractor without a license. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the commissioner of licensing and
regulation in SECTION 8 (Section 7A, Article 8861, V.T.C.S.), of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 2(7), Article 8861, V.T.C.S. (Air Conditioning
and Refrigeration Contractor License Law), to add repair of boilers or
pressure vessels and delete licensed persons in reference to operations not
included under the term "air conditioning and refrigeration maintenance
work." 

SECTION 2. Amends Section 3(b), Article 8861, V.T.C.S., to authorize the
commissioner of licensing and regulation (commissioner) to issue a cease
and desist order if the commissioner determines that an emergency exists
requiring immediate action to protect the public health and safety. 

SECTION 3. Amends Section 3B, Article 8861, V.T.C.S., by creating a new
Subsection (a) from new and existing text and adding Subsections (b) and
(c), as follows: 

Sec. 3B.  New title: REQUIREMENTS TO PERFORM AIR CONDITIONING AND
REFRIGERATION CONTRACTING.  (a) Prohibits a person from performing air
conditioning and refrigeration contracting unless the person is exempt
under Section 6 (Exemptions; Restrictions), Article 8861, V.T.C.S., or
practices within the scope of a municipal license. 

(b) Prohibits a person, corporation, partnership, or other legal entity
from performing or offering to perform air conditioning or refrigeration
contracting unless they employ full-time at each permanent office at least
one person licensed to perform the contracting, file the person's name with
the Air Conditioning and Refrigeration Contractors Advisory Board (board),
and use only appropriately licensed individuals to perform the contracting. 

 (c) Requires the person, corporation, partnership, or other legal entity
performing or offering to perform air conditioning or refrigeration
contracting, if that person is no longer appropriately licensed, to comply
with appropriate license requirements within 30 days. 

SECTION 4.  Amends Sections 4(f) and (g), Article 8861, V.T.C.S., to delete
from Subsection (f) the provision that  an application for an air
conditioning and refrigeration contractor license must be accompanied by
evidence of required insurance coverage.  Adds this requirement to
Subsection (g), and deletes the requirement to pay an examination fee.
Makes conforming and nonsubstantive changes. 

SECTION 5. Amends Section 5(a), Article 8861, V.T.C.S., to provide that
failure to provide proper installation, service, or, rather than and,
mechanical integrity constitutes a violation. 

SECTION 6. Amends Section 6(a), Article 8861, V.T.C.S., to make conforming
and nonsubstantive changes. 

SECTION 7. Amends Section 7, Article 8861, V.T.C.S., to create new
Subsections (a) and (b) from existing text and add Subsection (c)
authorizing a municipal authority to impose a reasonable fee necessary to
cover the cost of the notification required under this section. 

SECTION 8. Amends Article 8861, V.T.C.S., by adding Section 7A, to prohibit
a person, corporation, partnership, or other legal entity from enforcing a
contract or collecting a fee for air conditioning an refrigeration
contracting unless the person is properly licensed at the time the contract
is performed.  Requires the commissioner to adopt rules relating to the
manner in which proof may be presented under this section. 

SECTION 9. Amends Section 8, Article 8861, V.T.C.S., to provide that a
person commits a Class C, rather than Class B, misdemeanor by knowingly or
intentionally engaging in air conditioning and refrigeration contracting
without an appropriate license. 

SECTION 10. Amends Article 8861, V.T.C.S., by adding Section 8A, as follows:

Sec. 8A. ENFORCEMENT. Authorizes  a municipal or county law enforcement
officer to issue a citation for a violation of  Section 3B (License
required), Article 8861, V.T.C.S. Authorizes a representative of the Texas
Department of Licensing and Regulation, or a municipal air conditioning or
refrigeration inspector within the jurisdiction of the municipality to
issue a citation to a person who violates Section 10(e) or (f) (Sale and
Use of Refrigerants), Article 8861, V.T.C.S. 

SECTION 11. Amends Section 9, Article 8861, V.T.C.S., to provide that an
applicant for a municipal license must pass an examination covering the
same subjects as the examination required by the commissioner for the same
type of work, and meet the experience requirement under Section 4(e),
Article 8861, V.T.C.S.  Makes conforming and nonsubstantive changes. 

SECTION 12.  Amends Sections 10(g) and (h), Article 8861, V.T.C.S., to adds
to the list of those authorized to purchase refrigerants a person whose use
is exempt under Section 6(a) because the person performs air conditioning
and refrigeration contracting for an electric or gas utility, an industrial
operation, on portable, self-contained, or temporary equipment, or in motor
vehicles. Provides that an offense under this section is a Class C, rather
than Class B, misdemeanor. 

SECTION 13.  Amends Section 23(c), Article 6573a, V.T.C.S. (The Real Estate
License Act), by adding Subdivision (4), as follows: 

(4) Provides that a business entity that inspects an environmental air
conditioning system, commercial refrigeration system, or process cooling
and heating system as part of a real estate inspection must employ a person
who holds an appropriate air conditioning and refrigeration contracting
license.  Authorizes a person who does not hold an appropriate license to
perform an inspection under the direction of a license holder.  Defines
"inspection." 
 
SECTION 14.  Repeals Section 3(m), Article 8861, V.T.C.S., which authorizes
issuance of citations for violations of Section 10(e) or (f). 

SECTION 15. Makes application of Section 7(c), Article 8861, V.T.C.S., as
changed by this Act prospective.  

SECTION 16.  Makes application of Section 7A, Article 8861, V.T.C.S., as
added by this Act prospective.    

SECTION 17.  Provides that a person who knowingly or intentionally engages
in air conditioning and refrigeration contracting without an appropriate
license, or purchases certain refrigerants in violation of Sections 10(c),
(e), or (f), Article 8861, V.T.C.S., commits a Class C misdemeanor, unless
that person is finally convicted before the effective date of this Act. 

SECTION 18.  Makes application of Section 9, Article 8861, V.T.C.S., as
changed by this Act prospective, except that a person who holds a municipal
license must satisfy the examination requirements imposed by this Act no
later than June 1, 2000, if that person continues the practice of
contracting after September 1, 1999. 

SECTION 19.Effective date: September 1, 1999, except that Sections 6(a), 8,
and 10(g) and (h), take effect immediately.  Requires that the commissioner
adopt rules as required by Section 7A, Article 8861, V.T.C.S., no later
than December 31, 1999.  Makes application of  Section 23(c), Article
6573a, V.T.C.S., as changed by this Act prospective. 

SECTION 20.Emergency clause.