HBA-MPA C.S.H.B. 1822 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 1822 By: Yarbrough Licensing & Administrative Procedures 3/22/1999 Committee Report (Substituted) 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 unlicenced 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 unlicenced contractors and bring them into compliance. C.S.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 this bill does not expressly delegate rulemaking authority to state officer, department, agency, or institution. 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." Defines "air conditioning and refrigeration contracting" as performing or offering to perform certain task on specified equipment. SECTION 2. Amends Section 2, Article 8861, V.T.C.S., to define "air conditioning and refrigeration contracting company." SECTION 3. Amends Sections 3(b) and (m), Article 8861, V.T.C.S., to authorize the executive director to issue a cease and desist order if the executive director determines that an emergency exists requiring immediate action to protect the public health and safety. Authorizes a representative of the Texas Department of Licensing and Regulation (department), rather than Texas Commission of Licensing and Regulation, to issue a citation for violation of Section 10(e) or (f) (Sale and Use of Refrigerants). SECTION 4. Amends Section 3B, Article 8861, V.T.C.S., by creating Subsection (a) from existing text and adding Subsections (b) and (c), as follows: Sec. 3B. New title: LICENSE REQUIRED; CITATION. (b) Provides that an air conditioning or refrigeration contracting company must employ full time at each permanent office at least one person licensed to perform the contracting, and whose license is assigned to the company. (c) Authorizes a municipal or county official to issue a citation to an air conditioning and refrigeration contracting company that performs air conditioning and refrigeration contracting without the required license, unless exempt under this article. SECTION 5. Amends Article 8861, V.T.C.S., by adding Section3C, to prohibit an air conditioning or refrigeration contracting company from enforcing a contract or collecting a fee for air conditioning and refrigeration contracting unless a properly licensed person is employed at the time the contract is performed. SECTION 6. 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. Substitutes the executive director for the commissioner of licensing and regulation as the person required to issue a license. Makes conforming and nonsubstantive changes. SECTION 7. 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 8. Amends Section 6(a)(6) , Article 8861, V.T.C.S., to specify an exemption for work performed on residential refrigerators, freezers, and ice machines. SECTION 9. 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 municipality to impose a reasonable fee necessary to cover the cost of the implementation of this section. SECTION 10. 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 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 department for the same type of work the applicant proposes to perform, and meet the experience requirement under Section 4(e), Article 8861, V.T.C.S. Makes conforming and nonsubstantive changes. SECTION 12. 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 13. Makes application of Section 8, Article 8861, V.T.C.S., as changed by this Act prospective. SECTION 14. Makes application of Section 9, Article 8861, V.T.C.S., as changed by this Act prospective. Requires a municipality subject to Section 9 to adopt examination requirements no later than January 1, 2000. Provides 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 15.Amends Sections 10(h), Article 8861, V.T.C.S., to provide that an offense under this section is a Class C, rather than Class B, misdemeanor SECTION 16. Amends Section 10, Article 8861, V.T.C.S., by adding Subsection (j), to provide that a person is authorized to purchase refrigerants if the person 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. SECTION 17. Effective date: September 1, 1999. Requires that the commissioner of licensing and regulation adopt rules as required by Section 3A, 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 18.Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B.1822 differs from the original bill in SECTION 1 by amending Subdivision (9) to add to the definition of "air conditioning and refrigeration contracting" the words "to perform or offer to perform" in reference to certain tasks on specified equipment. C.S.H.B.1822 differs from the original bill by adding a new SECTION 2 to add a new Subdivision (14) to define "air conditioning and refrigeration contracting." C.S.H.B.1822 differs from the original bill in SECTION 3 by authorizing the executive director, rather than the commissioner of licensing and regulation, to issue a cease and desist order. Redesignates SECTION 3 from SECTION 2 of the original. C.S.H.B.1822 differs from the original bill in SECTION 4 by adding the new heading for Section 3B, LICENSE REQUIRED; CITATION, rather than REQUIREMENTS TO PERFORM AIR CONDITIONING AND REFRIGERATION CONTRACTING. It makes no change to the existing statutory text other than redesignating it as Subsection (a), and adds new Subsections (b) and (c). Redesignates SECTION 4 from SECTION 3 of the original. _Subsection (b) provides that an air conditioning and refrigeration contracting company must employ a license holder at each permanent office whose license is assigned to the office, rather than prohibiting the company to operate without such a licensee and requiring it to file the person's name with the Air Conditioning and Refrigeration Contractors Advisory Board. _Subsection (c) authorizes a municipal or county official to issue a citation to an air conditioning and refrigeration contracting company that performs air conditioning and refrigeration contracting without the required license, unless exempt under this article. _Deletes provision requiring 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. C.S.H.B.1822 differs from the original bill in SECTION 5 by making conforming and nonsubstantive changes. Redesignates SECTION 5 from SECTION 8 of the original. Rulemaking authority granted in SECTION 8 of the original is not present in SECTION 5 of the substitute. C.S.H.B.1822 differs from the original bill in SECTION 6 by substituting the executive director for the commissioner of licensing and regulation as the person required to issue a license. Redesignates SECTION 6 from SECTION 4 of the original. C.S.H.B.1822 differs from the original bill in SECTION 7 by redesignating from SECTION 5 of the original to SECTION 7 of the substitute. C.S.H.B.1822 differs from the original bill in SECTION 8 by specifying an exemption for work performed on residential refrigerators, freezers, and ice machines. Redesignates SECTION 8 from SECTION 6 of the original. Deletes a reference in the original to SECTION 10 of that bill. C.S.H.B.1822 differs from the original bill in SECTION 9 by redesignating from SECTION 7 of the original. C.S.H.B.1822 differs from the original bill in SECTION 10 by redesignating from SECTION 9 of the original. Makes conforming and nonsubstantive changes. Deletes Section. 8A. ENFORCEMENT. from SECTION 10 of the original. The authority previously found in that section is now conveyed to a municipal or county law enforcement officer to issue a citation in SECTION 4 of the substitute, and to a representative of the Texas Department of Licensing and Regulation in SECTION 3 of the substitute. C.S.H.B.1822 differs from the original bill in SECTION 12 by redesignating from SECTION 13 of the original. _Deletes the repealer of Section 3(m), Article 8861, V.T.C.S., which authorizes issuance of citations for violations of Section 10(e) or (f). C.S.H.B.1822 differs from the original bill in SECTION 13 by changing the language regarding the application of the Act. While SECTION 17 of the original provided that the Act was allocable to offenses committed before, on, or after its effective date, SECTION 13 of the substitute provides that the Act applies only to an offense committed on or after its effective date. C.S.H.B.1822 differs from the original bill in SECTION 14 by redesignating as SECTION 18 of the original to SECTION 14 of the substitute. C.S.H.B.1822 differs from the original bill in SECTION 15 by dividing SECTION 12 of the original and inserting here the provision in Subsection (h) that an offense under this section is a Class C, rather than Class B, misdemeanor. C.S.H.B.1822 differs from the original bill in SECTION 16 by inserting a new Subsection (j) providing that a person is authorized to purchase refrigerants if the person 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. These exemptions were granted in Subsection (g) by SECTION 12 of the original. C.S.H.B.1822 differs from the original bill in SECTION 17 by requiring that the commissioner of licensing and regulation adopt rules as required by Section 3A, Article 8861, V.T.C.S., no later than December 31, 1999 (Rulemaking authority granted in proposed new Section 7A, SECTION 8 of the original bill is deleted from the substitute.) Redesignates SECTION 17 from SECTION 19 of the original. C.S.H.B.1822 differs from the original bill in SECTION 18 by redesignating from SECTION 20 of the original and by changing the emergency clause so that it does not provide that the Act take effect and be in force according to its terms.